Global oil prices decline due to US-China trade war, according to CBOD Market Outlook on GhanaWeb

The recent Market Outlook by the Chamber of Bulk Oil Distributors (CBOD) sheds light on key global and local market trends influencing fuel prices in Ghana for the May 1–15, 2025 pricing window. Despite a slight increase in global oil prices in early 2025, there has been a significant decline in recent weeks, with Brent crude falling from $83 per barrel in February to around $67 in April.

The downturn in oil prices is largely attributed to the escalating trade tensions between the United States and China, leading to heightened global uncertainty that has dampened demand for crude oil. Additionally, renewed sanctions imposed by the U.S. government targeting Iran’s nuclear program and Russian entities involved in transporting Iranian oil to China are further tightening global trade flows.

Furthermore, the U.S. Energy Information Administration (EIA) projects a steady increase in U.S. oil production, with output expected to reach 13.59 million barrels per day (b/d) in 2025 and 13.73 million b/d in 2026. In a shift from previous plans, OPEC+ has announced an earlier-than-expected production increase starting in May instead of July, exacerbating the oversupply situation in the market.

As a result of these factors, crude oil prices have declined globally, with petrol, diesel, and LPG prices also taking a hit. This combination of rising supply and subdued demand has led to broad decreases in petroleum product prices.

On the domestic front, CBOD reports that the FuFeX30 rate, used to price petroleum products sold on credit, has been set at GHS14.5000/USD for the current pricing window. For cash sales, the spot FX rate is slightly higher at GH¢14.7000/USD, based on commercial bank quotes.

Despite the Bank of Ghana (BoG) allocating US$20 million to Bulk Import, Distribution, and Export Companies (BIDECs) in its biweekly FX auction, covering only 22% of total bids, the Ghanaian cedi has shown strength, appreciating significantly against the USD. This is attributed to the successful implementation of government fiscal policy measures from the 2025 Budget, aiding cedi stability and acting as a buffer against external shocks impacting domestic fuel prices.

CBOD elaborated on the Ex-Refinery Price Indicator (XPI) framework, which determines petroleum product pricing in Ghana based on international oil prices, a set breakeven premium, and relevant exchange rates. The report cautioned that unless geopolitical tensions ease and market imbalances are resolved, local fuel prices may continue to fluctuate due to rapidly shifting global supply and demand dynamics.