Oil falls nearly 4% as the US imposes 104% tariffs on China
The price of oil saw a huge drop, reaching its lowest levels in almost four years. This occurred during the early trading session. This decline can be ascribed to growing concerns regarding demand, which have been made worse by an expanding tariff battle between the United States of America and China, which are the two largest economies in the world, as well as an increasing supply projection.A decrease of $2.13, which is equivalent to a reduction of 3.39%, was recorded by Brent futures, which ultimately settled at $60.69 per barrel as of 0108 GMT. West Texas Intermediate crude futures in the United States witnessed a decrease of $2.36, which is equivalent to a reduction of 3.96%, pushing the price down to $57.22 from its previous level. Brent oil prices have dropped to their lowest levels since March 2021, and West Texas Intermediate (WTI) prices have reached their lowest point since February 2021. Both of these statistics are significant.Following the declaration made by President Donald Trump of the United States regarding the imposition of sweeping tariffs on the majority of imports, both benchmarks have seen a fall over the course of five straight sessions. Concerns have been voiced as a result of this new development that a global trade war might have a detrimental effect on economic growth and lower the demand for fuel.
A startling tax of 104% will be imposed on goods from China by the United States of America, and it will go into effect on Wednesday at 12:01 a.m. Eastern Daylight Time (0401 GMT). As a result of China’s inability to remove its retaliatory tariffs on items made in the United States by the deadline that President Trump imposed on Tuesday at noon, this news was made by a White House official during a briefing on Tuesday. The official also mentioned that the rise equals an additional fifty percent on tariffs.A startling tax of 104% will be imposed on goods from China by the United States of America, and it will go into effect on Wednesday at 12:01 a.m. Eastern Daylight Time (0401 GMT). Following China’s failure to remove its retaliatory tariffs on U.S. imports by the noon deadline that President Trump placed on Tuesday, this declaration was made by a White House official during a briefing on Tuesday. The announcement indicated that duties would be increased by fifty percent.
Beijing has made it clear that it intends to fight back against what it considers to be blackmail from the United States. This comes in response to President Trump’s threat of imposing a potential fifty percent rise in tariffs on Chinese imports if China does not remove its thirty-four percent retaliatory tax.”China’s assertive response reduces the likelihood of a swift agreement between the two largest economies, raising increasing concerns about a potential global economic downturn,” said Ye Lin, vice president of oil commodity markets at Rystad Energy. “Case in point: the United States and China.”According to Ye Lin, vice president of oil commodity markets at Rystad Energy, “China’s assertive response reduces the likelihood of a swift agreement between the world’s largest economies, raising increasing concerns about a potential global economic downturn.” This statement was made by Ye Lin.
As far as she is concerned, the continuation of the trade war poses substantial threats to China’s oil demand growth, which is estimated to be between 50,000 and 100,000 barrels per day. On the other hand, she pointed out that a comprehensive stimulus program with the goal of increasing domestic consumption could help compensate for any losses.The Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, came to a crucial decision last week to increase production in May by 411,000 barrels per day. This decision was taken by OPEC+. It is anticipated by analysts that this action will result in a surplus on the market, which will further exacerbate the decrease in the price of oil for consumers.
The forecasts of Goldman Sachs have been updated, and the company now suggests that the prices of Brent and WTI crude oil might fall to $62 and $58 per barrel, respectively, by the end of the year 2025: December. In addition, the projections indicate that the price of a barrel would continue to fall until December 2026, when it will be between $55 and $51 per barrel.As a result of a drop in oil prices that was noticed on Monday, the price of Russia’s ESPO Blend oil has, for the first time, fallen below the $60 per barrel level that was established by Western price controls. This is a significant milestone.
Recent information that was made public by the American Petroleum Institute indicates that the quantity of crude oil that was held in stock in the United States decreased by 1.1 million barrels during the week that ended on April 4. This is an important development for market demand. In contrast to the results of a poll conducted by Reuters, which predicted an increase of around 1.4 million barrels, this statistic indicates that nothing has changed.
