
<h2 class="wp-block-heading" id="h-topline">Topline</h2>



<p>Oil prices sunk 7% to a four-year low Friday, amid concerns economic fallout of President Donald Trump’s wide-reaching tariffs could put a drag on demand.</p>



<h2 class="wp-block-heading" id="h-key-facts">Key Facts</h2>



<p>Prices tumbled after China announced it would retaliate against the U.S. in a global trade war—imposing a 34% tariffs on U.S. goods, in line with Trump’s new 34% tariffs against China—with analysts saying traders were likely acting on the&nbsp;<a href="https://www.businessinsider.com/oil-prices-crash-trump-tariffs-opec-production-recession-trade-war-2025-4" rel="noreferrer noopener" target="_blank">damage</a>&nbsp;tariffs could do to global trade and economic growth.</p>



<p>Concerns of a tariff-induced drop in demand comes as the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, announced it is increasing output to 411,000 barrels per day in May, up from the previously planned 135,000 barrels per day, the organization said in a&nbsp;<a href="https://www.opec.org/pr-detail/557-03-april-2025.html" rel="noreferrer noopener" target="_blank">statement</a>.</p>



<p>Brent crude, the benchmark for global oil prices, dropped $4.57 to $65.56 a barrel and U.S. West Texas Intermediate was down $5 to $62 a barrel as of Friday afternoon.</p>



<p>Since Wednesday’s market close ahead of Trump’s tariff announcement, the price of Brent crude has dropped nearly 13% and WTI decreased 14%.</p>



<h2 class="wp-block-heading" id="h-will-gas-get-cheaper">Will Gas Get Cheaper?</h2>



<p>While crude oil prices do impact how much drivers pay at the pump, gas prices are also influenced by refinery and distribution costs, taxes and corporate profits, so it’s unclear exactly how an oil sell-off will affect consumers. The national average price for a gallon of regular gasoline is $3.27, up from $3.10 a month ago but down from $3.57 last year, according to AAA&nbsp;<a href="https://gasprices.aaa.com/" rel="noreferrer noopener" target="_blank">data</a>.</p>



<h2 class="wp-block-heading" id="h-how-much-more-could-oil-prices-drop">How Much More Could Oil Prices Drop?</h2>



<p>Goldman Sachs lowered its crude oil price forecasts late Thursday night, citing weakened demand, tariff escalation, growing recession risks and increased supply. The firm downgraded its Dec. 25 price forecasts of Brent and WTI to $66 and $62, respectively.</p>



<h2 class="wp-block-heading" id="h-did-trump-put-new-tariffs-on-oil">Did Trump Put New Tariffs On Oil?</h2>



<p><a href="https://www.reuters.com/business/energy/oil-imports-exempted-trumps-sweeping-tariffs-2025-04-02/" rel="noreferrer noopener" target="_blank">Fuel</a>&nbsp;was exempt from the sweeping tariffs announced Wednesday, but Trump has touted higher energy production and lower prices as a way to lower the inflation rate, which remains above the Federal Reserve’s 2% target.</p>



<h2 class="wp-block-heading" id="h-crucial-quote">Crucial Quote</h2>



<p>&#8220;The trade war escalated, recession fears rise and consequently oil demand growth is to take a sizeable hit,”&nbsp;<a href="https://finance.yahoo.com/news/oil-tumbles-8-china-retaliates-124226355.html" rel="noreferrer noopener" target="_blank">said</a>&nbsp;Tamas Vargas, analyst at PVM Oil Associates. “The fact that U.S. energy imports are exempted, and OPEC+ produced a bombshell by re-adding more oil in May than originally planned pours fuel to the bear&#8217;s fire. Volatility will persist, risk is off, and currently it is impossible to foretell when appetite for oil and equities will return.”</p>



<h2 class="wp-block-heading" id="h-key-background">Key Background</h2>



<p>The drop in oil prices comes as&nbsp;<a href="https://www.forbes.com/sites/siladityaray/2025/04/03/frances-macron-says-european-businesses-should-halt-us-investment-as-trump-tariffs-face-global-backlash/">global leaders</a>&nbsp;are reacting to the wide array of “reciprocal tariffs” levied by Trump on more than 180 countries, which includes baseline 10% tariffs for all. On Friday, Chinese state media announced it will impose an additional 34% import duty on U.S. goods in retaliation against Trump’s 34% tariff on Chinese goods (on top of existing tariffs, bringing the actual rate to 54%).</p>



<h2 class="wp-block-heading" id="h-further-reading">Further Reading</h2>



<p>France’s Macron Says European Businesses Should Halt U.S. Investment—As Trump Tariffs Face Global Backlash (<a href="https://www.forbes.com/sites/siladityaray/2025/04/03/frances-macron-says-european-businesses-should-halt-us-investment-as-trump-tariffs-face-global-backlash/">Forbes</a>)</p>



<p>China Retaliates Against Trump’s Tariffs With 34% Duties On U.S. Goods (<a href="https://www.forbes.com/sites/siladityaray/2025/04/04/china-retaliates-against-trumps-tariffs-with-34-duties-on-us-goods/">Forbes</a>)</p>



<p>Here’s What Will Cost More After Trump’s Tariffs: Coffee, Cars—And Possibly A $2,300 iPhone (<a href="https://www.forbes.com/sites/tylerroush/2025/04/03/heres-what-will-cost-more-after-trumps-tariffs-coffee-cars-and-possibly-a-2300-iphone/">Forbes</a>)</p>



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Tag: Trump Tarrifs

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Oil Prices Drop 7% To Four-Year Low As Tariff Fallout Sparks Recession Fears