Global oil costs have hit their lowest level since January as demand is dented by the effects of the US-China trade war, according to market analysts.

The cost of a barrel of Brent crude has tumbled almost 20% in the past month – with the rate of the decline accelerating late last week as China prepared to implement its response to the latest US tariff increases.

It hit a low of $60.21 on Tuesday amid growing evidence the world economy was feeling the effects of the spat between the globe’s two largest economies. It represented a fall of more than 1.5% on the day.

Market watchers said the decline also represented evidence of a possible split in the OPEC alliance of oil-producing nations.

The cartel – in partnership with Russia and some other producers – has been curbing production to prop up prices since the start of the year.

It is due to decide soon whether to extend the output restrictions until the end of the year – with early signs suggesting both OPEC and Russia favour such a move as demand falls.

However, the head of Rosneft – Russia’s largest oil producer – said he opposed continued restrictions and would seek compensation if it was unable to boost output.

They are battling a challenge from US-produced shale oil – which is cheaper and taking market share.

Analysts have said it is this factor that could force OPEC and Russia to change tack.

Any increases in production would likely lead to falling prices – particularly at a time of growing economic unrest.

World economic forecasters have repeatedly warned that the escalation in the US-China trade conflict would hit global trade and therefore demand for oil.

The plunge in oil costs in recent days should mean that prices begin to come down at the fuel pumps after four months of increased costs for motorists taking unleaded up by more than 10p a litre.

Motoring groups have long accused retailers of being quick to raise prices when oil costs rise but slow to pass on reductions.

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