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5mo ago

Oil Prices Hover at Four-Year Lows as Trade War and OPEC Decisions Shake Markets

Global crude benchmarks remain volatile near $60 per barrel following President Trump’s tariffs and OPEC+ production hikes, raising fears of recession and challenges for U.S. producers.

The crude oil tanker Aegean Myth is moored to a single point mooring (SPM) at the Caspian Pipeline Consortium's Marine Terminal in Yuzhnaya Ozereevka near the Black Sea port of Novorossiysk, Russia, July 31, 2021. Caspian Pipeline Consortium (CPC)/Handout via REUTERS REUTERS/File Photo
An oil tanker sails into New York Harbor as it arrives at the Port of New York and New Jersey following the Russian invasion of Ukraine, in Staten Island, New York City, U.S., March 10, 2022. REUTERS/Mike Segar/File Photo

Overview

  • West Texas Intermediate (WTI) and Brent crude oil prices have dropped to their lowest levels since 2021, trading near $60 and $64 per barrel respectively, with slight rebounds reported on April 8.
  • President Trump's sweeping tariffs on imports have triggered a global trade war, prompting retaliatory measures from countries like China and escalating fears of a global economic slowdown.
  • OPEC+ has announced a larger-than-expected production increase of 411,000 barrels per day starting in May, exacerbating the market oversupply and pressuring prices further.
  • Persistently low oil prices are threatening the profitability of U.S. energy producers, with many companies requiring prices above $60 per barrel to sustain drilling operations.
  • Analysts warn of extreme scenarios where oil prices could fall below $40 per barrel if the trade war leads to a global recession and OPEC+ fully unwinds its production cuts.