Crude Crash: Oil Prices Hit Rock Bottom on Supply, Tariff Concerns

Oil prices fell 2% to a 12-week low on Monday, influenced by reports that OPEC+ will proceed with a planned oil output increase in April and concerns that U.S. tariffs could negatively impact global economic growth and oil demand.

Brent futures settled at $71.62 a barrel, down $1.19, or 1.6%, while U.S. West Texas Intermediate (WTI) crude settled at $68.37, down $1.39, or 2.0%. These were the lowest closing prices for Brent since December 6 and WTI since December 9.

“Crude oil is under siege on multiple fronts and is vulnerable to the latest bearish headline or economic data,” stated a report, citing the OPEC+ decision, U.S. manufacturing data, Ukraine peace talks, and U.S. tariffs.

Sources within OPEC+ confirmed that the group will proceed with the planned April oil output increase. OPEC+ has been cutting output by 5.85 million barrels per day (bpd), approximately 5.7% of global supply, since 2022 to support the market.

Reports indicated that several proposals have been made for a truce between Ukraine and Russia, following a proposal for a one-month pause leading to peace talks. The U.S. is also reportedly developing a plan that could offer Russia sanctions relief.

Russia, a major oil producer and OPEC+ member, is a significant player in the global energy market.

Regarding trade, a decision is expected on Monday regarding U.S. tariff levels on Canada and Mexico, set to take effect on Tuesday, amidst ongoing negotiations concerning border security and efforts to combat fentanyl opioids. The U.S. has threatened tariffs of 25% on all imports from Canada and Mexico, with a 10% tariff on Canadian energy products.

Canada’s oilfield drilling and services sector has shown signs of slowing in anticipation of the threatened tariffs. Mexico has stated its readiness for any decision made by the U.S.

Trump has vowed to impose 25% tariffs on all imports from Canada and Mexico, with 10% on Canadian energy products.

Canada’s oilfield drilling and services sector was showing signs of slowing ahead of threatened tariffs.

Mexico’s President Claudia Sheinbaum said her country was ready for whatever decision Washington reached.

In response to U.S. tariffs, China, the second-biggest economy after the U.S., said it was preparing countermeasures to tariffs targeting U.S. agriculture.