Summary
• Brent, WTI sink by 6%
• Trump to impose 10% minimum tariff on most import goods
• Imports of oil, gas, refined products exempted from new tariffs
• OPEC+ to bring back more oil to market in May than previously planned
LONDON, April 3 (Reuters) – Oil prices fell 6% on Thursday as OPEC+ speeding up its unwinding of oil output cuts in May compounded already-heavy losses following U.S. President Donald Trump’s announcement of sweeping new tariffs on Wednesday.
Brent futures were down $4.51, or 6.02%, at $70.44 a barrel by 1221 GMT. U.S. West Texas Intermediate crude futures were down $4.63, or 6.46%, at $67.08.
Eight OPEC+ countries agreed to advance their plan for oil output hikes, now aiming to return 411,000 barrels per day to the market in May from 135,000 bpd initially planned, the group agreed in a ministers’ meeting on Thursday.
“I guess there is some confidence within the group that the market can absorb additional barrels in a period where demand seasonally rises, but also that the supply increase would be smaller due to compensation cuts as well other supply disruptions,” said UBS analyst Giovanni Staunovo.
Oil prices were already trading some 4% lower prior to the meeting, as investors reacted to Trump’s tariffs with concerns that the move would enflame a global trade war that will curtail economic growth and limit fuel demand.
Trump on Wednesday unveiled a 10% minimum tariff on most goods imported to the United States, the world’s biggest oil consumer, with much higher duties on products from dozens of countries.
The U.S. tariff announcement is “likely to cause chaos across global supply chains, while in the short term raising the risk of an economic fallout, hurting demand for key commodities”, said Saxo Bank analyst Ole Hansen.
Imports of oil, gas and refined products were exempted from the new tariffs, the White House said on Wednesday.
UBS analysts on Wednesday cut their oil forecasts by $3 per barrel over 2025-26 to $72 per barrel, citing weaker fundamentals.
Traders and analysts now expect more price volatility in the near term, given the tariffs may change as countries try to negotiate lower rates or impose retaliatory levies.
“Countermeasures are imminent and judging by the initial market reaction, recession and stagflation have become terrifying possibilities,” said PVM analyst Tamas Varga.
“As tariffs are ultimately paid for by domestic consumers and businesses, their cost will inevitably increase, impeding the rise in economic wealth.”
Further weighing on market sentiment, U.S. Energy Information Administration data on Wednesday showed U.S. crude inventories rose by a surprisingly large 6.2 million barrels last week, against analysts’ forecasts for a decline of 2.1 million barrels.
Reporting by Robert Harvey in London, Siyi Liu in Singapore and Nicole Jao in New York; Editing by Christian Schmollinger, Christopher Cushing, Ed Osmond and Jan Harvey
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