Oil prices extended their losses in early Asian trading on Friday, heading for their steepest weekly drop in months as new U.S. tariffs announced by President Donald Trump fueled fears of a global trade war. The measures, which impose a 10% baseline duty on all U.S. imports, have heightened economic uncertainty, raising concerns about weaker oil demand.
Brent crude futures slipped 31 cents, or 0.4%, to $69.83 per barrel by 01:57 GMT, while U.S. West Texas Intermediate (WTI) crude fell 32 cents, or 0.5%, to $66.63. Brent is on track for its largest percentage drop since mid-October, while WTI is set for its worst week since late January.
OPEC+ Accelerates Supply Increases
Adding to the market’s bearish outlook, the Organization of the Petroleum Exporting Countries (OPEC) and its allies (OPEC+) announced plans to accelerate their oil production increases. The alliance now aims to return 411,000 barrels per day (bpd) to the market in May—up from an initially planned 135,000 bpd—further intensifying supply pressures.
- Analysts at ING noted that the decision could drive a larger surplus in global crude supplies.
- The Brent-Dubai spread, which typically indicates market strength, has seen an unusual discount for much of the year.
These developments have reinforced bearish sentiment, with traders anticipating increased supply amid declining demand expectations.
Trump’s Tariffs and Their Impact on Oil Prices
Oil prices began their downward spiral after Trump’s Wednesday press conference, where he declared “Liberation Day” and revealed sweeping tariffs on U.S. imports. While oil, gas, and refined products were excluded from the new duties, broader economic concerns have weighed on market sentiment.
- Inflation risks are rising, potentially leading to weaker consumer and industrial demand.
- Slower economic growth could curb energy consumption, dampening future oil price gains.
- Trade disputes with key partners, including the European Union and China, could disrupt global supply chains.
While some analysts believe demand could recover later in the year, immediate risks remain tilted to the downside. Markets now await further guidance from the Federal Reserve and upcoming economic data releases for clues on the broader impact of the tariffs.
