Global crude oil prices, tracked by Brent, have dropped more than 6% so far in October, deepening year-to-date decline to over 17% in 2025.
Oil, which began the year around $74 per barrel, now struggles at $62 as it tries to hold above the $60 mark.
Analysts point to trade tensions between the United States and China, along with uncertainty surrounding U.S. economic policies, as major factors behind the decline.
“While talks between the two sides continue, the Chinese side 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.
Adding to the pressure are expectations that the U.S. Federal Reserve will cut interest rates twice more before the end of the year, following an earlier 0.25% reduction that lowered the federal funds rate to between 4.00% and 4.25%.
With oil more recently showing a positive correlation with U.S. economic performance, the weaker dollar and slowing growth outlook are now weighing more heavily on prices.
Historically, oil prices and the U.S. dollar have moved in opposite directions. But in recent years, that pattern has started to change, with both now often moving in the same direction.
J.P. Morgan analysts note that the steady rise in U.S. crude exports, particularly since 2022, has strengthened the link between oil prices and the dollar’s performance.
Data from the U.S. Energy Information Administration (EIA) shows a consistent climb in U.S. crude exports since 2021.
A weaker dollar no longer automatically boosts oil demand; instead, both now tend to move in sync. This means that when the dollar declines, oil prices are also likely to fall.
Crude oil began in 2025 at $74 per barrel, climbing to a yearly peak of $81 on January 15 before entering a steady decline.
Tariff tensions triggered a slide from February through early March, pulling prices below $71. A brief rebound in late March extended into early April, lifting prices back to around $74, but by mid-April, oil had plunged again, losing nearly 15.9% of its value.
By the end of June, Brent crude had fallen to $66 per barrel, marking an 11% drop for the first half of the year. During the same H1 period, the U.S. Dollar Index fell more than 10%, as investors shifted toward safe-haven assets like gold and other metals.
As of October 14, Brent is down more than 6% for the month as it fights to stay above the $60 mark.