[[{“value”:”
- Oil prices have crashed to their lowest point since 2021 due to the escalating US-China trade war.
- Analysts fear the trade war will lead to a global recession, significantly reducing oil demand.
- The oil price slump puts pressure on OPEC+, potentially leading to a reversal of their recent production increase.
Crude oil prices slumped to their lowest level since 2021 after the U.S. announced a fresh 50% tariff for Chinese imports following Beijing’s refusal to withdraw its retaliatory 34% tariffs announced in response to Washington’s imposition of a 34% tariff rate on top of already existing levies.
At the time of writing, Brent crude was trading at $60.36 per barrel, with West Texas Intermediate at $57.04 per barrel, both down by close to 4% from Tuesday’s close. Since the start of the year, the benchmarks have shed lover $10 per barrel and most analysts expect the rout to deepen as fears run high that tariffs would sap oil demand.
“China’s aggressive retaliation diminishes the chances of a quick deal between the world’s two biggest economies, triggering mounting fears of economic recession across the globe,” Rystad Energy Vice President for oil markets, Ye Lin, told Reuters. “China’s 50,000 bpd to 100,000 bpd of oil demand growth is at risk if the trade war continues for longer, however, a stronger stimulus to boost domestic consumption could mitigate the losses,” the analyst added.
“The broader move lower we’ve seen in crude oil since 2 April suggests the market is pricing in bigger odds of a recession,” ING analysts wrote in a note on Tuesday. “The scale of the sell-off will worry OPEC+, which last week surprised the market with a larger-than-expected supply hike for May. If downward pressure continues, the OPEC+ move could be very short-lived. We could see OPEC+ pause or even reverse supply increases,” they added.
Higher risks of recession and a higher-than-expected OPEC+ production boost for May prompted Goldman Sachs to slash its oil price forecasts for 2026 days after it had already cut its price outlook in the wake of the U.S. tariffs announcement last week.
Goldman Sachs’s analysts issued a new note dated April 6, in which they cut their 2026 oil price forecasts by $4 per barrel—to $58 for Brent crude and to $55 for the U.S. benchmark, WTI.
By Irina Slav for Oilprice.com
The post Oil Prices Drop to Lowest Level Since Pandemic as Trade War Accelerates appeared first on Energy News Beat.
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