Oil markets were rocked for a second consecutive day as prices tumbled to their lowest levels of 8% since 2021. Brent crude, the global benchmark, has plunged more than 10% in just two days, with Thursday alone seeing a 6.4% drop — its steepest fall since 2022. The sudden collapse came as traders reacted to a surprise output hike by OPEC+ and the escalating global trade war led by US President Donald Trump, reports Bloomberg.
OPEC+ rattles markets
In a move that caught the market off-guard, OPEC+ announced a tripling of its planned production increase for May. Experts suggested the decision aimed to drive down prices and penalise members exceeding their quotas. This marked a dramatic shift from previous efforts to stabilise the market and puts into question the group’s commitment to supporting higher prices.
Trump’s tariffs trigger fears of demand shock
Further fueling the downturn, Trump unveiled a sweeping new wave of tariffs, prompting fears of a global economic slowdown. China responded swiftly, with state media reporting 34% tariffs on all US imports. These retaliatory measures are stoking concerns about reduced oil consumption amid weaker trade and economic activity.
Wall Street is already adjusting. Goldman Sachs and ING have lowered oil price forecasts, citing heightened risks to demand and increased OPEC+ supply. Bearish options trading has surged, and futures timespreads are softening — a signal of expectations for looser supply-demand balances.
Despite the price drop, analysts caution that geopolitical tensions remain. U.S. sanctions on oil producers like Iran and Venezuela could limit supply.