Impact of US-China Trade War, Oil Prices Plummet

The United States imposes import tariffs on various products from China of 104 percent officially starting today, Wednesday (10/4). As a result, global crude oil prices plunged to their lowest level by more than 3%.

Oil prices saw a significant drop, with Brent down USD 2.13 (3.39%) to USD 60.69 per barrel and WTI down USD 2.36 (3.96%) to USD 57.22 per barrel. This is the lowest level for Brent since March 2021 and WTI since February 2021.

Benchmark oil prices have fallen for five consecutive days after US President Donald Trump announced high tariffs on imports, raising fears of a global recession and falling fuel demand. Oil prices will move pressured after OPEC+ decided to increase production by 411,000 barrels per day from May, which is expected to lead to oversupply in the market.

Goldman Sachs expects Brent and WTI oil prices to fall to USD 62 and USD 58 per barrel by December 2025, with further declines possible in 2026. In addition, the price of Russian ESPO oil also fell below USD 60 per barrel for the first time since the implementation of price caps by Western countries.

Data from the American Petroleum Institute showed that US crude oil reserves decreased by 1.1 million barrels in the week to April 4, contrary to expectations predicting an increase of 1.4 million barrels.