Oil prices ended last year with full-year losses for the first time since 2015 after a chaotic fourth quarter, which saw investors flee the market due to concerns over a supply glut and mix signals over US sanctions on Iran.
Over the year, US West Texas Intermediate Crude (WTI) future plummeted nearly 25%, while international benchmark Brent slumped over 19.5%.
The oil market had been on course to achieve solid gains for the year, until the US granted larger than expected waivers to Iranian oil importers in October and as demand from emerging markets began to sink.
This combination dragged prices of Brent crude from four-year highs of above $86 per barrel to $53.80 a barrel on Monday, representing the steepest quarterly decline since the fourth quarter of 2014.
Expectations surrounding the renewed US sanctions on Iran helped support the growth in oil prices witnessed throughout the first 9 months of the year, but when Washington provided larger waivers than expected to Iran’s biggest buyers, the markets became clouded by concerns over oversupply and slow economic growth.
As prices began to tumble, OPEC and its allies announced plans to cut 1.2 million barrels per day from the market in a bid to halt the decline.