Houston — Oil prices plunged 7% on Friday to settle at their lowest in over three years as China ramped up tariffs on U.S. goods, escalating a trade war that has led investors to price in a higher probability of recession.
China, the world’s top oil importer, announced it will impose additional tariffs of 34% on all U.S. goods from April 10. Nations around the world have readied retaliation after Trump raised tariff to their highest in more than a century.
Commodities including natural gas, soybeans and gold also dived, while global stock markets tumbled. Investment bank JPMorgan said it now sees a 60% chance of a global economic recession by year-end, up from 40% previously.
Global benchmark Brent futures settled $4.56, or 6.5%, lower at $65.58 a barrel, while U.S. West Texas Intermediate crude futures lost $4.96, or 7.4%, to end at $61.99.
At the session low, Brent fell to $64.03 and WTI hit $60.45, their lowest in four years.
For the week, Brent was down 10.9%, its biggest weekly loss in percentage terms in a year and a half, while WTI posted its biggest decline in two years with a drop of 10.6%.
“To me, this is probably close to fair value in crude until we get some sort of indication of how much demand has actually been reduced by,” said United ICAP Energy Specialist Scott Shelton.
“My opinion is we probably will end up in the mid to high $50s in the near term for WTI,” Shelton said, warning that demand would suffer under the current market circumstances.
Trump’s new tariffs are “larger than expected” and the economic fallout, including higher inflation and slower growth, likely will be as well, Federal Reserve Chair Jerome Powell said in remarks that pointed to the potentially difficult set of decisions ahead for the U.S. central bank.
OPEC+ INCREASES
Further pressuring oil prices, the Organization of the Petroleum Exporting Countries and allies (OPEC+) decided to advance plans for output increases. The group now aims to return 411,000 barrels per day (bpd) to the market in May, up from the previously planned 135,000 bpd.
A ruling by a Russian court that the Caspian Pipeline Consortium’s (CPC) Black Sea export terminal facilities should not be suspended also pressured prices lower. That decision could avert a potential fall in Kazakhstan’s oil production and supplies.
Imports of oil, gas and refined products were given exemptions from Trump’s sweeping new tariffs, but the policies could stoke inflation, slow economic growth and intensify trade disputes, weighing on oil prices.
Goldman Sachs analysts responded with sharp cuts to their December 2025 targets for Brent and WTI by $5 each to $66 and $62 respectively.
“The risks to our reduced oil price forecast are to the downside, especially for 2026, given growing risks of recession and to a lesser extent of higher OPEC+ supply,” the bank’s head of oil research, Daan Struyven, said in a note.
HSBC trimmed its 2025 global oil demand growth forecast from 1 million bpd to 0.9 million bpd, citing tariffs and the OPEC+ decision.
Money managers raised their net long U.S. crude futures and options positions in the week to April 1, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.
*Paul CartsenAdditional, Ahmad Ghaddar, Sudarshan Varadhan, Arunima Kumar. editing by Marguerita Choy and David Gregorio – Reuters
