Crude oil prices plunged nearly 8% on Friday, heading for their lowest close since the middle of the pandemic in 2021, as China ramped up tariffs on U.S. goods, sharply escalating a global trade war that has investors worried about a recession. China 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 barriers to their highest in more than a century. Commodities including natural gas, soybeans and gold also dived, while global stock markets tumbled. Investment bank JP Morgan said it now sees a 60% chance of a global economic recession by year end, up from 40% previously. Brent futures dived $4.68, or 6.67%, to $65.46 a barrel. U.S. West Texas Intermediate crude futures lost $5.07, or 7.6%, to $61.88.
At the session low, Brent fell to $64.03 and WTI hit $60.45, the lowest in four years. Both benchmarks were on course for their biggest weekly losses in percentage terms in more than two years. “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, in a very violent way,” 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 on Friday in remarks that pointed to the potentially difficult set of decisions ahead for the U.S. central bank.
Further pressuring oil prices, the Organization of the Petroleum Exporting Countries and allies in 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.
Also weighing on prices, the Caspian Pipeline Consortium (CPC) said a Russian court ruled its Black Sea export terminal facilities should not be suspended. That decision could avert a potential fall in Kazakhstan’s oil production and supplies. Imports of oil, gas and refined products were given exceptions 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.
