Brent crude dropped to $65 per barrel on Friday, marking its lowest point since December 2021. The sharp fall comes after new tariffs were announced by former U.S. President Donald Trump, alongside OPEC+’s decision to increase oil production.
The 6.2% one-day plunge reflects growing fears of a global trade slowdown. Analysts say weaker demand and excess supply are combining to drag prices down, raising concerns about wider economic impacts.
Trump’s new tariffs cause concern
Earlier this week, Trump unveiled a new round of import tariffs that will take effect on 9 April. These include a 10% duty on all imports into the United States, with extra tariffs of up to 34% on goods from China and other major trading partners like the EU and Canada.
The measures, designed to support American manufacturing, have instead raised concerns about a potential trade war. Economists warn that higher import costs could slow down global trade and reduce energy use in key industries.
OPEC+ boosts oil output
OPEC+, the alliance of major oil producers, announced on Thursday that it would raise production by 135,000 barrels per day in April. The move follows a pause in voluntary output cuts but has added more supply to a market already facing falling demand.
This combination of weak demand and growing supply has pushed oil prices down quickly. Brent crude was trading near $70 just days earlier but has now slumped to its lowest level in over three years.
Market and economic ripple effects
The fall in oil prices has hit markets and oil-producing countries. Russia’s rouble weakened as oil export revenue declined, while Saudi Arabia’s stock market suffered its biggest one-day drop in six months.
In the U.S., shale oil companies face tighter margins as lower prices make operations less profitable. Global stock markets also reacted negatively, with major indices in the U.S. and Asia falling sharply on fears of economic slowdown.
Looking ahead
Some analysts say oil prices could drop further if trade tensions continue and OPEC+ sticks to higher output levels. Others believe the group may reconsider its strategy to avoid losing market share.
The situation remains fluid, and energy markets are bracing for further volatility as economic and political developments unfold. For now, Brent crude’s fall to $65 serves as a reminder of how quickly global events can shift the balance in oil markets.
