At 12:40 in Lisbon, a barrel of Brent crude oil was trading at $64.75, down from $70.14 on Thursday following a drop of over 6%, and significantly lower than the $74.95 recorded on Wednesday, prior to the initiation of a trade war by President Trump.
Today, China announced a new decision set to take effect on April 10, in response to the US President’s imposition of an additional 34% tariff on Chinese products last Wednesday.
The benchmark Brent crude oil, a European reference, started today’s session with a significant decline, dropping 2.30% to $68.52 in the morning before sliding further.
The downward trend in crude oil prices persists as investors closely examine the repercussions of Trump’s announcement, specifically impacting China, the largest importer of crude oil.
In addition to China, Trump has imposed universal tariffs of 10%, with rates reaching 20% for the European Union (EU), raising concerns of a slowdown in crude oil demand, potential economic impact, and a possible recession.
Analysts have noted that the tariffs significantly affect Asia’s major emerging economies, which are crucial markets for the EU’s growth.
This development coincides with the Organization of the Petroleum Exporting Countries (OPEC+), led by Saudi Arabia and Russia, deciding to increase oil production by 411,000 barrels per day starting in May.
As such, the cartel has brought forward its commitment to reverse production cuts over the next 18 months.
Members of the organization, who met virtually on Thursday, stated that the decision to boost production was made considering the market’s positive outlook.
The shares of major oil companies listed in the London Stock Exchange fell today as well.
BP’s shares declined by 2.24% to 391 pence, while Shell’s shares fell 2.27% to 2,607 pence.
OPEC+ members had previously reduced production in recent years to drive up prices, but these cuts were not effective due to weak demand growth.
Imports of oil, gas, and refined products are exempt from Trump’s tariffs, yet experts believe that his policies may slow global economic growth and ultimately affect oil prices.
