Oil prices drop sharply this week. The main reason? New U.S. tariffs announced by President Trump. As expected, the move sparked fears of a broader global trade war. And clearly, those fears are shaking energy markets.
Oil traders reacted quickly. Brent crude fell to $69.83 per barrel. Meanwhile, West Texas Intermediate (WTI) dropped to $66.63. Both benchmarks are heading for their worst weekly loss in several months. The market clearly responded to Trump’s surprise announcement.
He introduced a 10% tariff on all imports. Though oil imports were spared, the ripple effect is strong. The new trade measures could slow growth and raise inflation. As a result, demand for oil could drop. This fear continues to pressure oil prices lower.
In addition to trade tensions, OPEC+ added fuel to the fire. The group advanced its plan to boost oil output. Originally, only 135,000 barrels per day were set to return in May. Now, that number has jumped to 411,000. More oil means more supply. And more supply usually pushes prices down.
According to analysts at ING, this change could also widen the Brent-Dubai spread. They noted an unusual discount in this spread earlier this year. Now, the market is expecting an even larger surplus.
This week’s sharp losses may not be the end. With inflation risks and slowing economies, oil traders are on edge. The combination of OPEC+ supply increases and U.S. trade measures has created a bearish outlook. And unless demand picks up soon, prices may fall even further.
Although oil was excluded from the new tariffs, the overall economic impact still matters. Investors are watching closely. And as always, news like this affects more than just energy prices.
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Oil prices drop sharply this week as Trump's new tariffs spark trade war fears. OPEC+ output increases add more pressure on markets.
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