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Oil prices dropped sharply on Thursday, extending steep declines as the OPEC+ alliance decided to accelerate the reversal of previous production cuts in May. This announcement amplified losses already triggered by sweeping new tariffs announced by U.S. President Donald Trump on Wednesday.
By 1305 GMT, Brent crude futures had slumped by $4.93, or 6.58%, to $70.02 per barrel, marking their largest single-day percentage decline since August 1, 2022. Similarly, U.S. West Texas Intermediate (WTI) crude futures fell sharply, losing $5.07, or 7.07%, to trade at $66.64 per barrel—the biggest daily percentage drop since July 11, 2022.
The sharp decline followed news from the OPEC+ ministerial meeting, where eight member countries agreed to accelerate their planned production increases. These nations will now add 411,000 barrels per day (bpd) of crude to the market starting in May, significantly higher than the original target of 135,000 bpd.
Prior to the OPEC+ decision, oil prices were already trading around 4% lower, reflecting investor anxiety following President Trump’s new tariffs. Market sentiment was weakened by concerns that the intensified global trade tensions could significantly dampen economic activity, leading to reduced demand for crude.
President Trump announced on Wednesday a sweeping 10% minimum tariff on nearly all imports to the U.S., alongside higher targeted duties on products from multiple countries. While oil, gas, and refined petroleum imports were explicitly exempted, the broader implications of escalating trade tensions continued to weigh on market confidence.
Traders and analysts anticipate increased market volatility in the near term, noting the possibility that tariff levels may shift as trading partners negotiate for lower rates or introduce retaliatory measures.
Adding further downward pressure, data released by the U.S. Energy Information Administration on Wednesday revealed that U.S. crude inventories unexpectedly surged by 6.2 million barrels last week, significantly exceeding analyst expectations of a 2.1-million-barrel decline.
