Oil Tanks Below $66 Amidst Global Trade ‘Tariffication’
Prices of crude oil fell below $66 per barrel in the global commodity market on Friday as the Organisation of Petroleum Exporting Countries (OPEC) and allied members (OPEC+) accelerated output growth.
The increase in oil supply and U.S. President Donald Trump’s global trade ‘tariffication’ were largely bearish for the commodities, and this dragged energy costs downward.
Brent plunged 6.5% to settle at $65.6 per barrel on Friday, marking the lowest level since August 2021, after a 6.4% drop the previous day, as fears mount over a global economic slowdown and weakening oil demand.
Investor sentiment is increasingly rattled by the escalating trade war, especially with China’s 34% tariff on U.S. goods. Recession risks and uncertainty around global trade are adding to the unease.
The Brent benchmark booked nearly 10% weekly drop—its steepest in six months. The US administration’s decision to impose at least a 10% tariff on imports from multiple trading partners has heightened fears of escalating global trade wars, potentially curbing oil demand.
Market participants are also wary that these measures—and their broader ramifications—could weigh on not only oil prices but also global trade and financial markets.
Brent crude, which had surged 3% earlier in the week following Trump’s warnings to Russia and Iran, slipped 0.3% to $74.30 per barrel on April 1, just ahead of the tariff announcement. West Texas Intermediate (WTI) crude, which had ended March on a positive note, also edged down 0.3% to $70.93.
The sell-off deepened on April 2 as “tit-for-tat” tariff measures were unveiled, with Brent and WTI falling below $70.
By April 3, Brent crude had plunged 5.4%, closing at $69.63, after Trump’s April 2 tariff actions—dubbed “Liberation Day” by the president—intensified expectations of weaker global demand. WTI saw an even steeper decline, sinking 5.6% to $66.33.
Trump announced sweeping tariffs on April 2, ranging from 10% to 50% on imports from dozens of countries and economic regions, including South Africa.
Imports from South Africa will face a 30% surcharge, while other countries, including Türkiye, the UK, Brazil, Australia, the UAE, New Zealand, Egypt, and Saudi Arabia, will see a 10% reciprocal tariff.
The EU will face a 20% tariff, while other nations will be subject to reciprocal tariffs as follows: China 34%, Vietnam 46%, Taiwan 32%, Japan 24%, India 26%, South Korea 25%, Thailand 36%, Switzerland 31%, Indonesia 32%, Malaysia 24%, Cambodia 49%, Bangladesh 30%, and Israel 17%.
Trump also provided further details on the previously announced 25% tariffs on automobiles, set to take effect on April 4. Additionally, on March 24, the US president announced a 25% tariff on nations purchasing oil or gas from Venezuela, effective April 2.
Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria, and Oman – members of OPEC – decided to fast-track their output hike plan, approving a 411,000 barrels per day (bpd) increase in May, equivalent to three months’ worth of planned increments.
The countries reaffirmed their commitment to market stability, citing a healthier oil market outlook, and agreed to raise production, according to an OPEC statement following an online meeting on Thursday
The eight countries had previously announced additional voluntary production adjustments in April and November 2023.
Citing ‘continuing healthy market fundamentals and the positive market outlook,’ OPEC stated that the eight countries will implement a production increase of 411,000 bpd in May, which includes three monthly increments.
‘This comprises the increment originally planned for May in addition to two monthly increments,’ OPEC said. The May hike is part of an ongoing plan to gradually unwind the 2.2 million bpd output cut, which began this month.
The statement emphasized that these incremental production increases could be paused or reversed based on evolving market conditions. This flexibility allows the group to continue supporting oil market stability and provides an opportunity for participating countries to accelerate their compensation process.
The eight OPEC+ countries will hold monthly meetings to assess market conditions, compliance, and compensation efforts, with the next meeting set for May 5 to decide on production levels for June. #Oil Tanks Below $66 Amidst Global Trade ‘Tariffication’ CBN to Open N800bn Treasury Bills for Subscription
