Trump triggers price crash: Oil plunges at fastest rate in years
Photo: Oil prices fell to their lowest level in three years (Getty Images)
Donald Trump's trade war and falling demand have led to the sharpest collapse in oil prices in recent years, Reuters reports.
Oil prices continued to fall on April 30, heading for their biggest monthly drop in nearly three and a half years. The reason is a worsening outlook for fuel demand due to the global trade war, as well as concerns about increasing supply.
Brent crude futures fell 1.8% to $63.1 a barrel by 08:13 GMT. US WTI fell 1.8% to $59.3 a barrel.
Record monthly decline since 2021
Brent has lost 15.4% since the beginning of the month, and WTI has lost 17%, which is the biggest percentage decline since November 2021.
Both brands fell sharply after US President Donald Trump announced on April 2 that he would impose tariffs on all imports. China’s response of tariffs has only increased tensions and triggered a full-blown trade war between the world’s two largest oil consumers.
Global recession looms
Trump’s tariffs are significantly increasing the likelihood of a global recession this year, according to a Reuters poll.
China’s manufacturing activity contracted at its fastest pace in 16 months in April, the survey showed. US consumer confidence also fell to its lowest level in nearly five years on growing concerns about tariffs.
OPEC+ may increase output
While Trump’s executive orders on Tuesday easing auto tariffs eased tensions on markets, oil prices continued to fall as OPEC+ countries increased supply.
Sources told Reuters last week that several members of the alliance will propose a second consecutive monthly output increase in June. The OPEC+ meeting is scheduled for May 5.
Oil markets under pressure from all sides
"The very real possibility that OPEC+ will continue to bring extra barrels to the market as it fights to keep order within its ranks is added to the diplomatic thrusts in Ukraine and Iran which if successful means more international crude on the water at a time when a trade war will squash any hope of demand growth," said PVM analysts.
The increase in oil inventories in the United States was also a negative signal: according to the American Petroleum Institute, inventories increased by 3.8 million barrels last week.
According to the agency, Trump's trade wars have slowed the growth of the Russian economy to zero, as they led to a drop in global growth forecasts and a decline in oil prices.
