Oil prices slump to fresh lows on tariffs, output hike
By Abigail Townsend
Date: Friday 04 Apr 2025
(Sharecast News) - Oil prices continued to tumble on Friday, hit hard by Donald Trump's swingeing tariff regime and a surprise output hike from Opec.
Benchmark Brent and WTI crude had both lost 6% by noon BST, falling to $65.93 and $62.66 a barrel respectively.
The last time Brent touched current levels was 2021.
The benchmark has now lost more than 10% in the two days since the US president imposed tariffs on a host of countries, leaving the world on the brink of an all-out trade war.
Economists expect the tariffs, along with any retaliatory action, to curtail economic growth, which in turn would weigh heavily on demand for oil.
The International Monetary Fund said Trump's tariffs posed a "significant risk" to the global outlook, while S&P Global Ratings said: "The new tariffs raise downside risks to our current macro baseline, with the ultimate near-term damage depending on how the tariff revenue is spent in the US as well as the scope and type of foreign country retaliation."
Oxford Economics warned that Trump's so-called Liberation Day tariffs, if fully implemented, "will send the advanced economies back into industrial recession just at the moment they were set to return to growth".
Further compounding pressure on oil prices, however, was a decision by Opec+ countries to increase output by 411,000 barrels a day in May.
The decision pushed already falling oil prices until $70 a barrel on Thursday.
The oil cartel and its allies had been scheduled to increase input by 135,000 barrels per day in May, as part of a gradual unwinding of recent output cuts. Opec said the decision to increase output further was based on "continuing healthy market fundamentals and the positive market outlook".
Analysts also pointed, however, to Opec taking a stricter approach to compliance, after some members did not cut output earlier this year as agreed.
Warren Patterson, head of commodities strategy at ING, said: "It is no secret that Trump wants lower oil prices and has pressured the Saudis to boost supply. This recent move might indicate that Trump has been more successful than many anticipated.
"There are also suggestions that [Opec] decided to increase supply to punish members who have been consistently producing above their production targets."
As at noon BST, BP had lost 5% at 380.55p while Shell was down 5% at 2,531p, amid difficult trading across the FTSE 100.
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