The price of Brent crude oil has fallen from $75 to below $63 per barrel since the middle of last week – a drop of nearly 20 percent. This is the lowest price in the past four years.

Indrek Sassi, head of fuel pricing at Circle K, said if Trump's tariffs stay in place at current levels, they will have a cooling effect on the economy, which would mean reduced demand for finished goods. However, if tariffs are lifted, oil prices could rise again, he said.

"Therefore, it's not out of the question that sharp declines could be followed by sharp increases," said Sassi. He noted that oil prices have historically ranged from below $20 to over $140 per barrel.

"Recent analyses indicate that due to unpredictable policy, oil prices could fall to between $50 and $60 per barrel," Sassi said.

Tarmo Kärsna, head of energy sales at Alexela, ERR previous estimates suggested prices below $60 per barrel would not be profitable for producers, and so the price might stabilize around $65.

"That's a perceived threshold where profitability could still work. The price cap imposed on Russia is $60 per barrel, which means the current price is already relatively close. When that cap was set, the goal was precisely to establish a level where producers would no longer profit," he said.

Another factor behind the price drop was last week's decision by the OPEC+ group to increase production volume by three times more than previously promised.

Swedbank senior economist Liis Elmik said the decision was unexpected. As a result, global oil supply has grown faster than demand.

Price drop expected at gas stations this week

Elmik added that cheaper oil is good news for the Estonian economy and will help ease the impact of fuel price increases following the May 1 excise duty hike.

Sassi said it will take a little time for the effect of the oil price drop to reach Estonia.

"Retail fuel prices mainly depend on the purchase prices of finished products, which do not always correlate directly with oil market prices. However, global developments have brought down finished product prices, and the impact generally reaches us within a week," he said.

Alexela's Kärsna added that lower prices are likely to reach gas stations within the next few days.

"Right now, gas stations are selling off higher-priced inventory, but since we purchase new fuel daily, it's a matter of days before prices in Estonia begin to drop," he said.

Diesel may become cheaper than gasoline, he added.

"In summer, gasoline demand begins to rise immediately, which means the price drop for gasoline may be smaller than for diesel. But looking at current prices, the drop may be around five cents per liter," Kärsna said.

The price of natural gas in Europe has also fallen rapidly: at the Dutch gas exchange TTF, the price was €58 per megawatt-hour two months ago; as of Monday, the price had dropped below €35. In just the last week, the price has fallen by nearly €9 per megawatt-hour.

This also affects the local retail market. Estonia's largest gas seller, Elenger, announced it will lower its gas price from the current €0.69 to €0.64 per cubic meter starting May 1. In March, the price was €0.78 per cubic meter.

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