Brent crude prices tumbled just over 4 percent early Friday after the U.K. voted in favor of leaving the European Union.
Brent crude fell to $48.70 per barrel before the opening bell on Friday, down from a five day high of $52.23 per barrel on Wednesday and $50.91 per barrel at the closing bell on Thursday.
The “Leave” camp won the national referendum vote with 51.9 percent of the vote on Thursday.
Although the national referendum is not legally binding, the vote prompted Prime Minister David Cameron to resign from his post.
According to the BBC, Cameron will end his tenure in October.
Several industry analysts told Marketwatch that the crude price dip is likely to persist in the short term as market participants sort out how the exit will impact trade relations.
“The core oil fundamentals are still unchanged, so I think we will have to wait a while for the dust to settle,” Olivier Jakob of Switzerland-based Petromatrix told Marketwatch.
The vote could also prompt another referendum vote in Scotland where voters favored remaining in the EU by a nearly two-to-one margin, the BBC said.
Royal Dutch Shell said that, although it supported remaining in the EU, it will continue to work alongside both the British government and European organizations.
“We will work with the UK government and European institutions on any implications for us,” a company spokesperson told Red Mist Media.
BP CEO Bob Dudley told USA Today earlier this week that he believes the exit will cause job losses in London.
The UK’s exit from the EU could make importing and exporting goods, including oil and gas products, more difficult and costly.
“A high proportion of the oil and gas sector’s exports currently go to EU countries and many jobs in the industry depend on trading with other organisations in the Single Market. Given these facts and that, after a long period of uncertainty, trading with the EU is now sure to become less easy, speedy or cheap, we quite understand why many oil and gas sector businesses will have concerns about their futures today,” managing director of Tudor International Freight David Johnson said.
According to the U.S. Energy Information Administration, UK petroleum product imports have continued to climb since the country became a net petroleum products importer in 2013.
Although the offshore areas of the UK are home to several large oil and gas fields production at those fields has generally been declining over the past several years.
Despite the production declines, the UK is currently the largest producer of oil and the second-largest producer of natural gas in the European Union, according to the EIA.