Brent and WTI Crude Prices Fall Sharply Amid Supply Concerns and Tariffs

Oil prices took a dive on Friday, dropping by 8% and reaching their lowest point since the height of the COVID-19 pandemic back in 2021. This decline is largely happening due to rising tensions in US China trade relations and announcements of plans to boost global oil supply, which left the markets rattled.

The decline came after China's announcement of retaliatory tariffs at 34% on all US goods, which are scheduled to kick in on April 10, as a response to the recent increases in U.S. tariffs. Brent crude, the global benchmark, dropped by 7.6% to $64.84 a barrel, while U.S. West Texas Intermediate (WTI) saw an 8.1% decrease, settling at $61.48 a barrel. Both benchmarks experienced their largest weekly drops in more than two years.

OPEC, the group of oil-producing countries has also recently unveiled a strategy to ramp up output quicker than what many had anticipated. They are now targeting an increase of 411,000 barrels per day to hit the market in May, a significant jump from an initial goal of just 135,000. This has sparked worries about oversupply, even with US tariffs giving a pass to oil and gas imports.

Goldman Sachs slashed its oil price forecasts, cutting Brent and WTI targets for late 2025 by 5%, each to 66 and 66 dollars per barrel. The bank said the reason for this was risks of recession and higher OPEC+ production. “The outlook for oil prices faces downward risks, especially if economic growth weakens,” said Goldman’s Daan Struyven.