Crude oil prices have dropped by more than 6% so far in October, extending this year’s decline to over 17% as the market struggles to maintain stability above $60 per barrel.
Oil, which opened the year at around $74 per barrel, now trades near $62 as renewed trade tensions between the United States and China weigh heavily on global demand expectations.
Market analysts link the decline to uncertainty surrounding U.S. economic policies and the standoff between the two largest economies. “While talks between the sides continue, China has vowed to ‘fight to the end’ if necessary—and oil producers are sensitive to such rhetoric,” said Suvro Sarkar, an analyst at DBS Bank.
The U.S. Federal Reserve’s monetary stance has added further pressure. After cutting interest rates by 0.25% earlier this year to between 4.00% and 4.25%, expectations are growing for two additional rate reductions before year-end.
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Although lower interest rates reduce borrowing costs for corporations, they also make the U.S. less attractive to investors seeking higher yields, adding volatility to commodity markets.
Analysts also note a shift in the relationship between oil and the U.S. dollar. Historically, both moved in opposite directions, but in recent years, they have become more aligned. The surge in U.S. crude exports—averaging over 4.1 million barrels per day in 2024—has strengthened that connection, according to data from the U.S. Energy Information Administration.
Crude oil began 2025 strong, hitting a yearly peak of $81 per barrel on January 15 before entering a steady decline. Tariff tensions in February triggered a sharp fall, pulling prices below $71. By mid-April, oil had lost nearly 16% of its value, and by June it hovered around $66 per barrel.
As of mid-October, crude prices remain down more than 6% for the month, with investors watching for signals of recovery amid continued global trade uncertainty.
