Oil prices fell sharply today as major benchmarks dropped in response to new U.S. tariffs and an unexpected increase in output by OPEC+.
Brent crude dropped 6.64% to $65.48. West Texas Intermediate (WTI) crude sank to $62.17, a 7.14% decline, and Murban crude slid 6.41% to $67.72. Natural gas also eased down by 0.41% to $4.121.
Tariffs Spark Market Panic
The market downturn followed the announcement by U.S. President Donald Trump of new tariffs on key trading partners. Analysts warn the move could weaken global economic growth, reducing oil demand as a result.
Earlier this week, Brent was trading above $70 per barrel and WTI was not far behind. The sudden tariff news triggered a panic selloff, especially in energy stocks across Australia, and a broader reaction in oil markets.
OPEC+ Production Surprise
In a further blow to prices, OPEC+ said it would increase oil output by 410,000 barrels per day starting in May far above the 135,000 barrels originally planned.
The group cited “healthy market fundamentals” as the reason, but analysts believe additional factors may include U.S. pressure for lower energy prices and concerns over supply disruptions from Iran and Venezuela.
Depot Prices Begin to Shift
The impact of falling global oil prices is beginning to ripple through the supply chain. Depots in Nigeria are reporting early signs of price adjustments as they respond to the dramatic drop in crude. While the changes are not yet significant, traders expect downstream prices to reflect the shift more fully in the coming days.
Analyst Warnings on Oversupply
ING analysts predict that a global oil surplus may now arrive sooner than expected. If demand weakens further due to trade tensions, the surplus could widen and continue to drag prices down.
Cautious Outlook Ahead
The International Monetary Fund (IMF) has also voiced concern, stating the new tariffs could hurt global growth. While most experts agree on the short-term negative effects, there is uncertainty about how long the tariffs will last and what their broader economic impact will be.
With prices tumbling and supply rising, the oil market faces a turbulent period ahead.
