Oil prices plunge as Trump’s tariffs fuel recession fears and trade war concerns
An American flag flies near the Phillips 66 Los Angeles Refinery Wilmington Plant in Wilmington, California, U.S. on November 19, 2024. (AFP Photo)
Oil prices dropped sharply on Thursday after U.S. President Donald Trump’s latest round of global tariffs stoked concerns of an escalating trade war, fueling fears of a recession and increased inflation.
Prices tumbled nearly 7%, falling below $70 per barrel as investors worried that an economic downturn would dampen oil demand.
Brent crude futures settled at $70.14 per barrel, down $4.81, or 6.42%. U.S. West Texas Intermediate (WTI) crude futures closed at $66.95 per barrel, dropping $4.76, or 6.64%.
Brent was on track for its largest percentage decline since August 1, 2022, while WTI was set to post its biggest drop since July 11, 2022.
OPEC+ members agree to accelerate oil output increase plans
Meanwhile, at a ministers’ meeting on Thursday, OPEC+ members agreed to accelerate their oil output increase plans, now aiming to add 411,000 barrels per day to the market in May, up from the initial 135,000 bpd target.
“The economy and oil demand are inextricably linked,” said Angie Gildea, KPMG U.S. energy leader. “Markets are still digesting tariffs, but the combination of increased oil production and a weaker global economic outlook puts downward pressure on oil prices, potentially marking a new chapter in a volatile market.”
Oil prices were already down around 4% before the meeting, with investors anxious that Trump’s tariffs would intensify the global trade war, hinder economic growth, and reduce fuel demand.
