The increase in oil supply and U.S. President Donald Trump’s global trade ‘tariffication’ were largely bearish for the commodities, and this dragged energy costs downward.
Brent plunged 6.5 per cent to settle at $65.6 per barrel on Friday, marking the lowest level since August 2021, after a 6.4 per cent drop the previous day, as fears mount over a global economic slowdown and weakening oil demand.
Investor sentiment is increasingly rattled by the escalating trade war, especially with China’s 34 per cent tariff on U.S. goods. Recession risks and uncertainty around global trade are adding to the unease.
The Brent benchmark booked nearly 10% weekly drop—its steepest in six months. The US administration’s decision to impose at least a 10% tariff on imports from multiple trading partners has heightened fears of escalating global trade wars, potentially curbing oil demand.
Market participants are also wary that these measures—and their broader ramifications—could weigh on not only oil prices but also global trade and financial markets.
Brent crude, which had surged 3% earlier in the week following Trump’s warnings to Russia and Iran, slipped 0.3 per cent to $74.30 per barrel on April 1, just ahead of the tariff announcement. West Texas Intermediate (WTI) crude, which had ended March on a positive note, also edged down 0.3 per cent to $70.93.
The sell-off deepened on April 2 as “tit-for-tat” tariff measures were unveiled, with Brent and WTI falling below $70.
By April 3, Brent crude had plunged 5.4 per cent, closing at $69.63, after Trump’s April 2 tariff actions—dubbed “Liberation Day” by the president—intensified expectations of weaker global demand. WTI saw an even steeper decline, sinking 5.6 per cent to $66.33.
Trump announced sweeping tariffs on April 2, ranging from 10 per cent to 50 per cent on imports from dozens of countries and economic regions, including South Africa.
Imports from South Africa will face a 30 per w surcharge, while other countries, including Türkiye, the UK, Brazil, Australia, the UAE, New Zealand, Egypt, and Saudi Arabia, will see a 10% reciprocal tariff.
The EU will face a 20 per e tariff, while other nations will be subject to reciprocal tariffs as follows: China 34 per cent , Vietnam 46 per cent , Taiwan 32 per cent , Japan 24 per cent , India 26 per cent , South Korea 25 per cent , Thailand 36 per cent , Switzerland 31 per cent , Indonesia 32%, Malaysia 24 per cent , Cambodia 49 per cent , Bangladesh 30 per cent , and Israel 17 per cent .
Trump also provided further details on the previously announced 25 per cent tariffs on automobiles, set to take effect on April 4. Additionally, on March 24, the US president announced a 25 per cent tariff on nations purchasing oil or gas from Venezuela, effective April 2.
Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria, and Oman – members of OPEC – decided to fast-track their output hike plan, approving a 411,000 barrels per day (bpd) increase in May, equivalent to three months’ worth of planned increments.
SOURCE: Blueprint