Brent crude oil, the international benchmark, is trading down as much as 6% in Asia in the wake of the UK’s vote to secede from the European Union. After climbing as high as $50.90 a barrel on June 23, the Brent price fell as low as $47.54 just a few hours later today.
It is one of the biggest single-day oil price plunges of the last, extremely volatile two years, and is part of a general atmosphere of chaos in the markets, in which the British pound, US Treasury yields, and stock markets have also plummeted, while the price of gold has surged.
Brexit now joins a wave of instability in the global markets that have kept oil one of the world’s most turbulent commodities. Until now, oil prices have been unsettled by militant attacks in the Niger Delta, unrest involving ISIL in Libya, and fires in Canada that collectively have taken up to 4 million barrels a day of oil off the market. Brexit is a different type of instability, creating uncertainty about the fifth-largest economy in the world, and the EU as a whole. Worries also took hold that Europe could see a wave of copycat secessions, including Scotland from the UK.