Oil prices are on track to close at their lowest level since the peak of the COVID-19 pandemic in 2021, largely due to recent tariffs imposed by U.S. President Donald Trump and increased output from the OPEC+ producer group. On Friday, oil benchmarks fell sharply after China announced it would implement higher tariffs of 34% on all U.S. goods starting April 10. The global response to Trump’s tariffs has led to escalating trade tensions, resulting in significant declines in financial markets worldwide.
As of 1124 GMT on Friday, Brent Crude futures dropped by $3.48, or 5%, settling at $66.66 a barrel. Meanwhile, U.S. West Texas Intermediate (WTI) crude futures fell by $3.55, or 5.3%, to $63.40. Both benchmarks are headed for their most substantial weekly losses in percentage terms in six months.
The heightened uncertainty surrounding these trade policies prompted investors to seek refuge in bonds, with the Japanese yen and gold also experiencing gains. The dollar index, which compares the U.S. currency with six others, fell to 102.98, the lowest level since mid-October. John Evans of PVM remarked that the oil market is reflecting a sell-off reminiscent of the chaos seen during the pandemic.
This downturn has been exacerbated by OPEC+’s decision to accelerate output increases, with plans to raise production by 411,000 barrels per day in May, a considerable jump from a previously set target of 135,000 barrels. Although oil imports received exemptions from Trump’s latest tariffs, there are concerns that these trade policies could provoke inflation and slow economic growth. In light of these developments, Goldman Sachs adjusted its December 2025 price targets for Brent and WTI down by $5 each.
Conversely, analysts at Rystad Energy believe oil prices may recover amidst potential supply disruptions related to sanctions and tariffs, predicting that prices are unlikely to remain under $70 for an extended period.