Oil prices fell on Thursday (April 3) as the oil production alliance “OPEC+” decided to accelerate the easing of oil production cuts in May, exacerbating the sharp drop caused by US President Trump’s announcement of comprehensive new tariffs on Wednesday.
As of 13:05 GMT, Brent crude futures dropped $4.93 to $70.02 per barrel, a decrease of 6.58%; US West Texas Intermediate crude futures fell $5.07 to $66.64, a drop of 7.07%.
Brent crude is experiencing its largest drop since August 1, 2022, while West Texas Intermediate crude is seeing its biggest decline since July 11, 2022.
During Thursday’s ministerial meeting, eight “OPEC+” countries agreed to advance their respective oil production increase plans, aiming to restore the daily oil supply to the market to 411,000 barrels in May, instead of the initially planned 135,000 barrels.
Analyst Ole Hansen from Saxo Bank said, “First, concerns about economic recession and demand triggered by Trump’s tariff rocket, now combined with the prospect of ‘OPEC+’ and increased oil supply, have led to oil prices plummeting for two consecutive days, relinquishing over half of last month’s gains.”
Hansen added, “Unless secondary tariffs and direct sanctions lead to a reduction in oil supply, traders will again focus on the risk of oversupply damaging prices.”
Prior to this meeting, oil prices had already dropped by about 4% as investors reacted to Trump’s tariffs, fearing that they would escalate global trade wars, thereby suppressing economic growth and limiting fuel demand.
On Wednesday, Trump announced a 10% minimum tariff on almost all goods imported into the US, as well as higher retaliatory tariffs on products from dozens of countries.
The US is the world’s largest oil consumer, and the White House announced on Wednesday that imported oil, natural gas, and refined oil will be exempt from new tariffs.
On Wednesday, UBS analysts lowered their oil price expectations for 2025-2026 by $3 per barrel to $72.
Further dampening market sentiment, data from the US Energy Information Administration on Wednesday showed a surprisingly large increase of 6.2 million barrels in US crude inventories last week, while analysts had predicted a decrease of 2.1 million barrels.