Oil Prices Continue to Decline as Market Pressures Mount

According to Reuters, on April 7, oil prices fell by another three percent, extending the downward trend that persisted throughout the previous week. Brent crude traded at $64.17 per barrel on Monday — its lowest since April 2021. 

Over the past week, prices dropped by 10.9%, partly due to trade tensions between the U.S. administration and China.

It's hard to see a limit to the decline in oil prices until the panic in the markets subsides, which is unlikely to happen unless Trump speaks out to stop the growing fears of a global trade war and recession,
said oil analyst Vandana Hari. 

According to Bloomberg, Saudi Aramco has announced a $2.3 per barrel price cut for May. On April 3, Saudi Arabia, an OPEC member, also declared an increase in daily oil supplies by 400,000 barrels.

Sources cited by Bloomberg suggest that the adjustments are aimed at reinforcing quota discipline.

Experts and media outlets had previously claimed that Saudi Arabia might lower prices and increase output to address concerns about oversupply from certain member countries. Kazakhstan has been mentioned among those frequently exceeding agreed production limits.

Oil market analyst Olzhas Baidildinov wrote in his Telegram channel that for local consumers, current market dynamics could lead to a weakening of the tenge and higher fuel prices. He notes that the impact on Kazakhstan’s budget and National Fund revenues may begin to be felt closer to summer.

The oil prices that we often see in the news are futures for delivery in a month. That is, around $60 per barrel are prices in May 2025. As a rule, this time lag begins to affect the budget in a month or two, that is, in June-July. Our August is usually 'rich' in currency fluctuations. The budget of the Republic of Kazakhstan is based on $75 per barrel and a dollar exchange rate of 470 tenge,
Baidildinov explains. 

He also noted that Kazakhstan has limited flexibility in adjusting production, as key fields such as Tengiz, Kashagan, and Karachaganak are operated by consortiums of foreign investors. 

For these companies, OPEC quotas are often secondary to revenue. Meanwhile, domestic-oriented fields cannot significantly cut output. 

Meanwhile, Kazakhstan’s Ministry of Energy has reiterated its commitment to OPEC+ agreements and expressed readiness to revise output levels if necessary.

Original Author: Nikita Drobny