Oil prices dropped sharply this week to $65 per barrel after U.S. import tariffs and an unexpected increase in OPEC+ supply caused a $10 per barrel decline in global benchmarks.
Last week, oil prices rose after U.S. President Donald Trump imposed tariffs on countries importing crude from Venezuela. However, by Friday, prices turned down, with Brent crude falling to $65, marking its lowest point since 2021.
According to oilprice.com, the combined impact of Trump’s tariffs, OPEC+’s decision to speed up the rollback of production cuts, and China’s retaliatory actions led to a $10 per barrel drop in global oil prices. This caused ICE Brent to fall below $65 for the first time since August 2021.
U.S. West Texas Intermediate crude futures dropped by $4.96, or 7.4%, to close at $61.99.
Oilprice.com noted that, despite some changes in backwardation, U.S. tariffs appeared to be the main factor driving the price drop. The week’s events may not be remembered positively in the history of oil markets.
China’s retaliatory tariffs on U.S. goods have intensified the trade war, leading investors to anticipate a higher risk of recession. China, the world’s largest oil importer, announced it would impose an additional 34% tariff on all U.S. goods starting April 10.
In addition to tariffs, OPEC+ further pressured oil prices by advancing plans to increase output. The group now aims to return 411,000 barrels per day to the market in May, up from the previously planned 135,000 bpd.