Oil prices tumbled today, with the main US crude contract WTI shedding 5.2%, as investors eyed weaker demand following President Donald Trump’s sweeping tariffs.
West Texas Intermediate slumped to $68.02 per barrel and European benchmark, Brent North Sea crude, retreated 4.8% to $71.37.
Trump yesterday unveiled a 10% minimum tariff on most goods imported to the US, the world’s biggest oil consumer, with much higher duties on products from dozens of countries, initiating a global trade war that threatens to drive up inflation and stall US and worldwide economic growth.
“The US tariff announcement clearly caught markets off guard. Pre-announcement speculation suggested a flat 15-20% tariff, but the final decision was more hawkish,” Yeap Jun Rong, market strategist at IG, said.
“For oil prices, the focus now shifts to the global growth outlook, which is likely to be revised downward due to these higher-than-expected tariffs,” he added.
Imports of oil, gas and refined products were exempted from the new tariffs, the White House said yesterday.
UBS analysts 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, as 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,” the analyst added.
