Oil prices fell by 8% on Friday, heading toward their lowest close since the height of the COVID-19 pandemic in 2021, as China hit back in an escalating global trade war with the United States following a barrage of tariffs announced earlier this week by President Donald Trump.
Brent crude futures dropped by $5.30, or 7.6%, to $64.84 per barrel as of 12:54 GMT, while U.S. West Texas Intermediate (WTI) futures fell by $5.47, or 8.2%, to $61.48. Both benchmarks were on track for their largest weekly percentage losses in over two years.
The sell-off was fueled by escalating fears of a global trade war after China responded aggressively to new U.S. tariffs, signaling a deepening economic rift. “China’s aggressive move on U.S. tariffs confirms that we are heading toward a global trade war—a war with no winners, which will hurt economic growth and reduce demand for key commodities like crude oil and refined products,” said Ole Hansen, head of commodity strategy at Saxo Bank.
Adding further pressure to oil prices was the decision by the Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+, to proceed with plans to increase production. The group now aims to return 411,000 barrels per day (bpd) to the market in May, significantly higher than the previously scheduled 135,000 bpd.
This move has contributed to the bearish sentiment in the market, with traders concerned that increased supply amid weakening demand could exacerbate the downward pressure on prices.
