Oil prices dip below $65 as Trump’s crude tariffs, OPEC+ production hike, and China’s retaliation trigger $10 per barrel market loss

[dropcap]O[/dropcap]il prices suffered a sharp decline last week, with Brent crude falling below $65 per barrel for the first time since August 2021, following a confluence of disruptive global developments.

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According to Oilprice.com, the drop was driven by U.S. President Donald Trump’s sweeping tariffs on countries purchasing crude oil from Venezuela, OPEC+’s premature decision to unwind production cuts, and China’s retaliatory trade measures. The combined impact wiped off approximately $10 per barrel from global oil prices.

Brent crude closed at $65 on Friday, while U.S. West Texas Intermediate (WTI) futures lost $4.96, or 7.4 per cent, ending the week at $61.99.

“Seeing backwardation barely change compared to the beginning of the week, one could assume that US tariffs are the defining factor for the price change. Nevertheless, this week will not go down well in the history of oil markets,” Oilprice.com reported.

The imposition of tariffs by Trump marks a dramatic escalation in his administration’s trade tactics, which have now extended to energy markets.

The decision has provoked widespread concern among oil-exporting nations, with several preparing to retaliate.

Adding to market volatility, the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) announced plans to accelerate their output increases.

Instead of the initially scheduled rise of 135,000 barrels per day (bpd), the group will now add 411,000 bpd to the global supply in May—raising fears of oversupply amid weakening demand projections.

Further exacerbating the situation, China—currently the world’s largest importer of crude oil—announced a 34 per cent retaliatory tariff on all U.S. goods, effective from 10 April.

This move is expected to intensify an already heated trade war and has led to investor fears of a global economic downturn.

According to Reuters, several countries are now considering countermeasures as Trump’s new tariffs reach levels not seen in over a century.

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With geopolitical tensions, uncertain demand forecasts, and looming recession fears, analysts warn that the volatility in oil markets could persist for the foreseeable future.