SINGAPORE/BEIJING: Oil prices tumbled to their lowest levels in over four years on Wednesday, rattled by escalating trade tensions between the United States and China, coupled with rising global supply concerns. The downturn follows the U.S. imposition of a staggering 104% tariff on Chinese imports, reigniting fears of a prolonged trade war and weakening fuel demand.
Brent crude fell by $2.38, or 3.79%, to $60.44 per barrel, while U.S. West Texas Intermediate (WTI) dropped $2.46, or 4.13%, to $57.12 — both hitting their lowest since February 2021. Brent’s six-month spread narrowed to just 79 cents, signaling a potential supply surplus.
The slide marks the fifth consecutive session of losses since President Donald Trump unveiled sweeping tariffs on Chinese goods, with Beijing retaliating and dismissing U.S. demands as “blackmail.”
“The tit-for-tat tariffs reduce chances of a near-term resolution, amplifying global recession fears,” noted Ye Lin, Vice President at Rystad Energy. She warned that China’s oil demand growth of 50,000 to 100,000 barrels per day could be at risk if tensions persist.
Further pressure came from OPEC+’s recent decision to increase output by 411,000 barrels per day in May, a move analysts say could tip the market into surplus.
Goldman Sachs now projects Brent to fall to $62 per barrel by end-2025, and $55 by end-2026.
Meanwhile, Russia’s ESPO Blend fell below the $60 Western price cap for the first time ever. In a slight relief, API data showed U.S. crude inventories declined by 1.1 million barrels last week, against expectations of a build. Official EIA figures are due later today.
