Oil Extends Sharp Drop After Surprise OPEC+ Hike, Trump Tariffs

Oil fell further after President Donald Trump’s tariffs and an OPEC+ decision to increase output faster than previously announced triggered the worst rout since 2022.

Brent crude fell to around $70 a barrel after plunging 6.4% on Thursday. West Texas Intermediate was below $67. Hours after Trump’s deluge of tariffs created fresh doubts about the outlook for the global economy, OPEC and its allies tripled a planned output hike for May in what delegates described as a deliberate effort to drive down prices to punish members that were producing more than their quota.

The two moves sent shockwaves across oil markets, though potentially offer a win for Trump, who has repeatedly bemoaned high crude prices. While falling costs could ease inflationary pressures for central banks, they also underscore a wider concern about the outlook for growth that’s led firms across the industry to slash their forecasts in recent weeks.

“The perfect bearish cocktail has been mixed in Washington and in Vienna,” said Tamas Varga, an analyst at brokerage PVM Oil Associates Ltd. “The reciprocal tariffs on virtually every salient US trading partner justifiably raise the fears of recession and possibly stagflation. Economic and oil demand growth is adversely impacted.”

Crude has been whipsawed by conflicting drivers since Trump came into office. While the threat of US sanctions on producers including Russia, Iran and Venezuela could tighten supplies, the escalating global trade war may hurt demand growth. China’s lackluster consumption is also bearish.

Goldman Sachs Group Inc. cut its price outlook after the rout, lowering its forecast for Brent by $5 a barrel to $66 in December. Price volatility is also “likely to stay elevated on higher recession risk,” analysts including Daan Struyven said in a note.

Prices:

• Brent for June settlement fell 0.8% to $69.57 a barrel at 2:18 p.m. in Singapore.

• WTI for May delivery dropped 0.9% to $66.37 a barrel.