Oil prices drop to pandemic lows amid US-China trade war
Illustrative photo: oil prices have plummeted due to the decisions of the US and China (Getty Images)
Oil prices fell sharply on April 4, dropping by 8% to their lowest levels since mid-2021, Reuters reports.
Brent crude futures declined by $5.30, or 7.6%, to $64.84 per barrel. US West Texas Intermediate (WTI) futures dropped by $5.47, or 8.2%, to $61.48. Both benchmarks are experiencing the sharpest weekly drop in two years.
This drop in prices came after China’s announcement that it will impose an additional 34% tariff on all US goods starting April 10. The move came in response to US President Donald Trump's decision to introduce tariffs on Chinese products.
“China's aggressive countermove to US tariffs all but confirms we are heading towards a global trade war; a war that has no winners and which will hurt economic growth and demand for key commodities such as crude oil and refined products,” said Ole Hansen, Head of Commodity Strategy at Saxo Bank.
Reuters also noted that oil prices are under additional pressure from OPEC+ plans to accelerate oil production increases.
While US tariffs do not directly affect the import of oil, gas, or refined products, such measures could lead to inflation, slow economic growth, and escalate trade disputes, putting pressure on oil prices.
Trump's decision
US President Donald Trump has imposed additional tariffs on imports from a number of countries. In particular, the restrictions affected China, Ukraine, and the EU.
Against this background, the European Union announced that it was preparing retaliatory measures. According to French President Emmanuel Macron, tariffs may be imposed on Google and other US services.
