Although the coronavirus outbreaks across the globe have played a role in denting travel and transportation, Saudi Arabia and Russia are major contributors to the nosediving oil price tag, according to a report from the Associated Press.
By Monday, the price of U.S. crude oil fell as much as $27.34 a barrel, which is the lowest price the energy sector has seen since early 2016. It is also the largest single-day drop since the 1991 Gulf War, according to the AP.
The price drops are a swift consequence of Russia’s refusal to cut production under an OPEC proposal, which has led Saudi Arabia — the second-leading oil producer in the world — to cut its prices and ramp up production over the weekend.
If the proposal had been accepted, the production cut of 1.5 million barrels a day would have kept oil prices from sagging in the midst of declining demand. However, the agreement would have required Russia — the world’s third-leading oil producer — and other nonmember countries to drop 500,000 barrels per day to meet the cuts.
When news of the sudden and steep price drop reached President Donald Trump on Monday, he jumped on Twitter to look on the bright side for the American consumer.
“Good for the consumer, gasoline prices coming down,” Trump wrote in his tweet.
GasBuddy, a consumer gasoline website that tracks gas prices across the country, said the national average price of gasoline had already fallen 6.2 cents to $2.41 per gallon in a gas report last week thanks to coronavirus fears.