Crude Oil Prices Fall as Trade War Fears Weigh on Demand Outlook

Oil prices slid further on Tuesday, as the prolonged U.S.-China trade conflict raised fears of a global recession and dampened expectations for fuel demand growth.

• By 04:00 GMT:
  • Brent crude futures fell 44 cents, or 0.7%, to $65.42 per barrel.
  • West Texas Intermediate (WTI) crude futures dropped 40 cents, or 0.6%, to $61.65 a barrel.

Both benchmarks extended Monday’s losses, when prices fell by more than $1.

Trade War Pressures Demand Outlook

The persistent trade tensions between the world’s two largest economies have heightened concerns over global growth:

• President Donald Trump’s sweeping tariffs on all U.S. imports have raised recession risks, according to a majority of economists surveyed by Reuters.
• China, bearing the brunt of U.S. tariffs, retaliated with its own levies on American goods, escalating the trade war.

This hostile trade environment has led analysts to cut oil demand and price forecasts:

• Barclays lowered its 2025 Brent crude forecast by $4 to $70 a barrel, citing:
  • Elevated trade tensions.
  • A shift in OPEC+ production strategy that could result in a 1 million barrel per day supply surplus this year.

OPEC+ Supply Increases Loom

Adding to the downward pressure:

• Several OPEC+ members are expected to propose a second consecutive monthly acceleration of oil output hikes in June.
• This move could flood the market with additional barrels at a time when demand growth is under threat from trade-induced economic weakness.

OPEC+ includes the Organization of the Petroleum Exporting Countries and its key allies, such as Russia.

U.S. Inventories Expected to Rise

Further weighing on sentiment:

• A preliminary Reuters poll suggests that U.S. crude oil stockpiles likely rose by about 500,000 barrels for the week ended April 15.

Key reports to watch:

• American Petroleum Institute (API) inventory estimates due later Tuesday.
• Energy Information Administration (EIA) official figures expected on Wednesday.

In Summary

Oil markets are under intense pressure from a combination of rising supply expectations and weaker demand outlook driven by geopolitical tensions and tariff wars. Near-term direction will depend heavily on fresh inventory data and any breakthrough — or escalation — in U.S.-China trade discussions.