China’s finance ministry announced it would impose 84% tariffs on US goods starting Thursday, up from a previously planned 34%, in response to President Donald Trump’s sweeping tariff policy. The tit-for-tat measures intensified concerns over economic growth, dragging oil prices lower. Brent futures fell $4.02, or 6.40%, to $58.80 a barrel by 1153 GMT, while U.S. West Texas Intermediate (WTI) crude futures dropped $4.03, or 6.76%, to $55.55. Both benchmarks have declined for five straight sessions since Trump’s tariff announcement.
“The trade war puts China’s oil demand growth of 50,000 to 100,000 barrels per day at risk if it drags on,” said an industry source familiar with Chinese markets. “Stronger domestic stimulus could offset some losses, but the outlook remains uncertain.” Analysts warn that prolonged tensions could further erode fuel demand, compounding pressure from rising supply.
Adding to the bearish sentiment, OPEC+ decided last week to ramp up output by 411,000 barrels per day (bpd) starting in May, a move analysts say could tip the market into surplus. “OPEC+ is signaling a shift away from restraint, which risks flooding an already fragile market,” said Ashley Kelty, an analyst at Panmure Liberum.
Goldman Sachs revised its oil price forecasts downward, projecting Brent at $62 and WTI at $58 a barrel by December 2025, falling further to $55 and $51 by December 2026. “The combination of tariff escalation and higher OPEC+ supply creates significant downside risks,” the bank said in a note.
