Crude oil prices plunged to their lowest since February 2021, fueled by the intensifying US-China trade war and escalating fears of a global economic slowdown.
Brent crude fell by 3.3% to $60.74 per barrel, while West Texas Intermediate (WTI) decreased by 3.5% to $57.49, reflecting the volatile geopolitical landscape. Investors are concerned about weakening demand and a potential oversupply, as indicated by the Brent market's shrinking backwardation. Tensions rose with President Trump's 104% tariffs on Chinese imports, prompting China to retaliate against US goods. Experts, including those from Rystad Energy, warn that China's firm stance diminishes hopes for a quick resolution, intensifying recession fears. Meanwhile, OPEC and its allies plan to increase production by 411,000 barrels per day in May, which could lead to a surplus and further suppress prices.
Market reactions reveal investor anxiety as declining oil prices impact the energy sector, compressing margins and curbing investment. Energy stocks face pressure in the current environment of ample supply and uncertain demand. Moreover, industries relying on stable oil prices might see volatility spread into broader financial markets, prompting investors to prepare for potential challenges.
This trade conflict isn't merely a bilateral issue—it reshapes global trade dynamics with far-reaching effects. The ongoing tariff exchanges between the world's largest economies could disrupt global supply chains and slow economic growth. If the deadlock persists, it may prompt policy shifts and strategic diplomatic moves worldwide, as nations adapt to new economic realities and potential recessions loom.