Oil prices hit multiyear lows due to trade war escalation and fears of plummeting demand

From Yahoo Finance: 2025-04-04 15:06:00

Oil futures hit multiyear lows as China retaliated against US tariffs, sparking fears of plummeting demand amid a trade war. West Texas Intermediate fell over 7% to $61.99, while Brent futures dropped over 6% to $65.58. Crude last traded at these levels in 2021.

China announced 34% tariffs on US goods in response to Trump’s levies, causing deepened crude losses. Trump’s tariffs on China led to market turmoil, with crude sinking over 6% as traders feared the impact of a trade war on demand.

JPMorgan’s Natasha Kaneva warned that ongoing tariffs could push the US and global economies into a recession this year. Energy equities, like XLE, were expected to continue declining after leading the market lower due to trade war concerns.

OPEC+ agreed to increase oil supply more than anticipated from May, further accelerating crude losses. KPMG’s Angie Gildea noted that increased oil production and a weaker economic outlook are driving oil prices down, marking a new chapter in a volatile market.

Despite energy being exempt from recent tariffs, Trump’s global trade war could still harm oil demand. Goldman Sachs analysts lowered their oil forecast for 2025, citing tariff escalation and higher OPEC+ supply as key risks.

Read more: Oil tanks to multiyear lows as trade war escalates, cratering demand fears rise