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A dramatic shift in global oil prices has seen the benchmark price plunge to $65 per barrel, the lowest since 2021. The sudden drop is attributed to the combined effects of US import tariffs and an unexpected OPEC+ supply hike.

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According to (link unavailable), “The combined effect of Trump’s import tariffs, OPEC+’s inopportune decision to speed up the unwinding of production cuts, and China’s retaliatory actions wiped off $10 per barrel from global oil prices, with ICE Brent falling below $65 per barrel for the first time since August 2021.”

The US West Texas Intermediate crude futures lost $4.96, or 7.4%, to end at $61.99. (link unavailable) reports, “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.”

The escalating trade war between the US and China 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 US goods from April 10. Reuters reports that nations around the world have readied retaliation after Trump raised tariffs to their highest in more than a century

Aside from the tariffs, OPEC+’s decision to advance plans for output increases further pressured oil prices. The group now aims to return 411,000 barrels per day to the market in May, up from the previously planned 135,000 bpd. This move has added to the downward pressure on oil prices, causing concerns among investors and industry experts

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