Prices of crude oil on the international markets is expected to fall by 24.1 percent to sell at an average of $73.1 per barrel in 2023, this is according to the IMF’s April 2023 World Economic Outlook Report.

The development will be a significant reduction from the $96.4 per barrel sold in 2022.

The International Monetary Fund said price of crude oil will however continue to drop in the coming years to an average of $65.4 per barrel in 2026.

In its April 2023 World Economic Outlook Report, the Fund explained that “uncertainty around this price outlook is elevated in part due to the uncertain rebound in China’s growth, as well as the energy transition”

In the wake of tough economic conditions on the globe, prices of crude oil retreated by 15.7 percent between August 2022 and February 2023 on the back of weakened demand.

Market leaders like China have also witnessed their first annual decline in oil consumption due to a resurgence in COVID-19 outbreaks and concerns in the real estate market.

Fears of a looming economic recession, coupled with inflation hikes, banking sector crisis and tightening of monetary policies in key economies, have all impacted on the oil demand and pricing.

The IMF report however noted that on the supply side, Western sanctions against Russia and its efforts to export crude oil have also impacted on global market balances.

“As of March, Russian crude oil exports had held steady since implementation of the Group of Seven (G7) price cap and ban on crude oil imports on December 5 [2023]. Russia rerouted its oil, reportedly sold at a major discount to Brent oil prices, to nonsanctioning countries, primarily India and China,” the IMF report noted.

MA