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Record drop: the US-China tariff war weighs on oil markets
On 9 April, world oil prices plunged to their lowest level in more than four years, as a result of growing concerns over the tariff escalation between Washington and Beijing, as well as the prospect of a market glut. This is reported by Reuters.
Brent futures fell by $2.38 (-3.79%) to $60.44 per barrel.
WTI fell by $2.46 (-4.13%) to $57.12, the lowest since February 2021.
The decline has been going on for five sessions in a row since Donald Trump announced the imposition of 104% tariffs on Chinese goods. In return, China retaliated with 34% duties and promised not to be “blackmailed”.
“China’s aggressive retaliation reduces the chances of a quick settlement, which increases the risks of a recession,” said Ye Lin, vice president of Rystad Energy.
According to estimates, oil demand in China may decline by 50-100 thousand barrels per day, although domestic demand may be a compensating factor.
OPEC+ has also intervened in the situation, increasing production quotas by 411 thousand barrels per day since May. This creates the risk of oversupply.
Goldman Sachs has revised its forecasts:
- By December 2025, Brent could drop to $62, and WTI to $58;
- by the end of 2026 – $55 and $51 per barrel, respectively.
For the first time since 2022, Russian ESPO Blend crude has fallen below $60/bbl, breaking the price ceiling set by the West.
The decline in US crude oil stocks by 1.1 million barrels, according to API, provided some relief, which may indicate that demand has stabilised.
