Oil prices drop to near 4-year low on trade conflict

.


Reuters April 08, 2025

print-news
NEW YORK:

Oil prices slid 2% on Monday, hitting their lowest levels in nearly four years, as fears escalated that US President Donald Trump's latest trade tariffs could tip the global economy into recession, reducing energy demand worldwide.

Trading was volatile throughout the session, with prices initially plunging more than $3 a barrel overnight before rebounding by over $1 on reports the White House called "fake news" that Trump was considering a 90-day tariff pause for all nations except China. Brent crude fell $1.24, or 1.9%, to $64.34 per barrel by 1646 GMT, while US WTI dropped $1.21, or 2%, to $60.78. After an 11% decline last week, both benchmarks are heading for their lowest closes since April 2021.

Trump on Monday threatened further tariffs on China, raising the stakes in an ongoing trade war that has already wiped trillions from global stock markets. China responded by announcing a 34% levy on US goods, prompting Trump to warn of a 50% tariff on Chinese imports if Beijing does not withdraw its retaliatory tariffs on the US, and said "all talks with China concerning their requested meetings with us will be terminated." Goldman Sachs, citing growing economic risks, now sees a 45% chance of a US recession within 12 months and has revised its oil price forecasts downward. Citi and Morgan Stanley also cut their Brent outlooks. JPMorgan, last week, projected a 60% chance of a US and global recession.

The European Commission announced a "zero-for-zero" tariff proposal to prevent further trade escalation with the US, while planning targeted countermeasures for next week. The Fed may raise interest rates to counter inflation, which could further slow economic growth and reduce oil demand.

Saudi Arabia on Sunday slashed crude oil prices for Asian buyers to a four-month low. Analysts said the move reflects fears that trade tensions will undermine demand. Adding to pressure, the OPEC+ alliance advanced plans to raise output by 411,000 barrels per day in May, up from 135,000 bpd. Ministers urged compliance and requested plans by April 15 from members exceeding quotas.

COMMENTS

Replying to X

Comments are moderated and generally will be posted if they are on-topic and not abusive.

For more information, please see our Comments FAQ