Apr 9, 2025
Oil prices have fallen to their lowest point since the pandemic as the trade war intensifies.
Crude oil prices fell to their lowest level since 2021 after the U.S. imposed a new 50% tariff on Chinese imports, following China's refusal to lift its own retaliatory 34% tariffs that were enacted in response to the U.S.'s initial 34% tariff on existing taxes.
As of the time of this report, Brent crude was priced at $60.36 per barrel, while West Texas Intermediate was at $57.04 per barrel, both showing a decline of nearly 4% from Tuesday's closing values. Since the beginning of the year, these benchmarks have lost over $10 per barrel, and many analysts predict that the decline will worsen due to concerns that tariffs might reduce oil demand.
Ye Lin, Vice President for oil markets at Rystad Energy, told Reuters that China's aggressive response reduces the likelihood of a swift agreement between the world’s two largest economies, raising worries about a potential global economic recession. He noted that if the trade conflict persists, China's anticipated oil demand growth of 50,000 to 100,000 bpd could be jeopardized, although increased domestic stimulus might help offset some of these losses.
According to ING analysts, the broader downward trend in crude oil prices since April 2 suggests that the market is factoring in a greater likelihood of a recession. They expressed concern that this significant sell-off could trouble OPEC+, which unexpectedly increased supply for May. If downward pressure persists, the OPEC+ decision might be very temporary, with a possibility of pausing or even reversing supply increases.
The heightened risk of a recession, coupled with an unexpected increase in OPEC+ production for May, led Goldman Sachs to revise its oil price forecasts for 2026, just days after it had already lowered its expectations following the U.S. tariffs announcement last week.
In a new report dated April 6, Goldman Sachs analysts reduced their 2026 oil price predictions by $4 per barrel, setting them at $58 for Brent crude and $55 for the U.S. benchmark, WTI.
As of the time of this report, Brent crude was priced at $60.36 per barrel, while West Texas Intermediate was at $57.04 per barrel, both showing a decline of nearly 4% from Tuesday's closing values. Since the beginning of the year, these benchmarks have lost over $10 per barrel, and many analysts predict that the decline will worsen due to concerns that tariffs might reduce oil demand.
Ye Lin, Vice President for oil markets at Rystad Energy, told Reuters that China's aggressive response reduces the likelihood of a swift agreement between the world’s two largest economies, raising worries about a potential global economic recession. He noted that if the trade conflict persists, China's anticipated oil demand growth of 50,000 to 100,000 bpd could be jeopardized, although increased domestic stimulus might help offset some of these losses.
According to ING analysts, the broader downward trend in crude oil prices since April 2 suggests that the market is factoring in a greater likelihood of a recession. They expressed concern that this significant sell-off could trouble OPEC+, which unexpectedly increased supply for May. If downward pressure persists, the OPEC+ decision might be very temporary, with a possibility of pausing or even reversing supply increases.
The heightened risk of a recession, coupled with an unexpected increase in OPEC+ production for May, led Goldman Sachs to revise its oil price forecasts for 2026, just days after it had already lowered its expectations following the U.S. tariffs announcement last week.
In a new report dated April 6, Goldman Sachs analysts reduced their 2026 oil price predictions by $4 per barrel, setting them at $58 for Brent crude and $55 for the U.S. benchmark, WTI.