Oil Prices Collapse Amid Trump Tariffs and OPEC+ Decision
Oil futures dropped sharply Thursday as new tariffs from President Donald Trump and rising global supply roiled financial markets. West Texas Intermediate (WTI) fell over 7.5% to $66.10, while Brent crude tumbled more than 7% to trade under $70 per barrel.
Traders were caught off guard by Trump’s latest protectionist push, which sent shockwaves through commodities. Meanwhile, OPEC+ announced it would add more barrels than anticipated to the market starting in May, compounding the sell-off.
Market Uncertainty Triggers Panic Selling
Dennis Kissler, SVP at BOK Financial Securities, described the sharp oil decline as “panic selling” rather than a reflection of true fundamentals. “There are a lot of unknowns, so you’re seeing funds quickly unwind positions,” he told Yahoo Finance.
KPMG’s U.S. energy leader Angie Gildea added that increased oil production combined with weakening global economic expectations could usher in a new chapter of market volatility.
OPEC+ Output Increase Adds to Supply Fears
The OPEC+ alliance announced a surprise production hike of 411,000 barrels per day starting in May. This boost in oil output comes at a time when the global economy is already under strain from tariffs, inflation, and geopolitical tensions.
Investors had previously viewed Trump’s aggressive stance on Iran, Venezuela, and Russian oil exports as bullish for crude. However, the latest production news and tariffs altered that outlook dramatically.
China Tariffs Spark Demand Concerns
China, the world’s largest oil importer, is now subject to a 54% tariff on imports from the U.S. This raised alarms about future demand. CIBC’s Rebecca Babin called it “a significant negative surprise,” especially for emerging markets driving crude demand growth.
Emerging economies most affected by the tariffs also represent a large share of the oil demand engine. As these markets slow, global consumption may weaken further.
Gas Prices Spike, Then Pull Back
Before the collapse, U.S. gasoline prices reached their highest level since last September. The average price hit $3.25 per gallon, driven by rising crude costs earlier in the week.
However, with Thursday’s sharp fall in oil, consumers may see some relief at the pump—provided the downturn in energy prices holds.