Ongoing trade tensions between the United States and China, the world’s two largest economies, led to a decline in global oil prices on Tuesday. This prolonged trade war has dampened investor expectations for global oil demand growth, casting uncertainty over the market outlook.
By 6:35 a.m. GMT, Brent crude had fallen by 51 cents (0.8%) to $65.35 per barrel, while U.S. West Texas Intermediate (WTI) dropped 50 cents to $61.55 per barrel. Both benchmarks had already lost more than 1% during Monday’s trading.
Priyanka Sachdeva, a senior market analyst, emphasized that escalating trade tensions could steer the global economy toward recession, adding considerable pressure to the oil market. She also noted that the absence of clear signs of a sustained demand recovery in China remains a critical factor behind the recent price drop.
Recent surveys reveal that many economists are warning of a heightened risk of global recession due to President Donald Trump’s trade policies, including sweeping tariffs on imported goods. China’s retaliatory tariffs on U.S. products have further intensified the trade conflict and clouded demand forecasts.
Barclays Bank, citing rising trade frictions and shifts in OPEC+ production strategies, cut its forecast for Brent crude in 2025 by $4 to $70 per barrel. The bank warned that a daily supply surplus of around one million barrels could increase downward pressure on prices.
Meanwhile, sources close to OPEC+ suggested that some members are likely to propose a second consecutive monthly production increase in June—an action that could trigger further price declines.
Additionally, preliminary estimates indicate that U.S. crude oil inventories may have risen by about 500,000 barrels in the week ending April 15, further weighing on prices.
