Brent price crash adds to oil chaos even as OPEC+ rushes to cut output

The historic fall of the US benchmark West Texas Intermediate (WTI) crude oil futures for May to minus $37 a barrel on Monday created panic in the oil and financial markets across the globe. On Tuesday, the widely accepted benchmark Brent crude (cash) plunged more than 20 per cent to below $20 a barrel, triggering a sell-off in stock markets.

For India that benchmarks its imports giving 25 per cent weight to Brent, the crude oil basket is one third at $20 of 2019-20 average of $60.6 a barrel. The Indian crude oil basket, that gives another 75 per cent weight to Dubai-Oman, is expected to fall further on Wednesday.

Global demand for crude oil was already declining because of an economic slowdown, but lockdowns across the world due to the Covid-19 pandemic worsened the situation.