Brent crude dropped below $60 per barrel on Tuesday hitting its lowest level in four years as U.S. President Donald Trump’s latest round of tariffs fueled concerns about weakening global energy demand.
The international benchmark fell as much as 4.3% during intraday trading amid growing fears that a prolonged trade war will push the global economy toward recession. West Texas Intermediate also declined for a fifth consecutive session as broader risk assets sold off sharply.
Crude prices have now fallen nearly 20% year-to-date amid deteriorating investor sentiment and reduced demand expectations.
The new tariffs implemented at midnight by the United States affect more than 60 countries with a 104% duty on several Chinese goods standing out as the most aggressive measure.
The move has triggered expectations of further retaliation from major trading partners and intensified the risk-off mood in global markets.
In addition to trade-related pressure, a faster-than-expected easing of output curbs by OPEC+ has added to market concerns about a supply glut.
Analysts warn that the combination of weakening demand and rising production could weigh heavily on crude prices in the months ahead.
“Tariff escalation continues to sour the global growth outlook leaving further downside risk to oil demand” said Warren Patterson head of commodities strategy at ING Groep NV in Singapore. “With no signs of de-escalation risks remain skewed to the downside.”
Market indicators are signaling worsening conditions as the spread between Brent futures for December 2025 and December 2026 has shifted into contango where near-term prices fall below long-dated contracts.
Implied volatility in crude markets has risen to the highest level since late 2021 while options data points to the most bearish sentiment in over two years.
Despite concerns about rising inflation caused by higher tariffs, oil’s decline may offset some price pressures, especially in energy-linked products.
U.S. gasoline futures have dropped approximately 16% in April, reducing fuel costs across multiple sectors.
The collapse in crude prices places additional pressure on oil producers and exporting nations, many of which rely heavily on petroleum revenues to fund budgets.
It also complicates central bank strategies as monetary authorities navigate inflation risks alongside economic slowdowns.
Unless a resolution is reached in the ongoing trade conflict or OPEC+ reverses course on production policy the outlook for crude remains bearish.
Market participants will continue to monitor geopolitical developments and inventory trends to assess future price direction.
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