Oil Prices Tumble as Tariff Fears and OPEC+ Production Hikes Weigh on Markets

Oil prices in Asian trading remained nearly unchanged on Friday, hovering close to their weakest levels for the year, as fears of increased U.S. trade tariffs continued to dampen risk appetite. Brent crude futures for May delivery rose 0.2% to $69.60 per barrel, while West Texas Intermediate crude futures climbed 0.2% to $66.11 per barrel by 21:06 ET (02:06 GMT). Brent had steadied after hitting its lowest level in over three years.

Both benchmarks are on track to post a weekly decline of between 4.5% and 5%, marking their third consecutive week in the red and the worst weekly performance since early October. The sell-off comes as U.S. President Donald Trump imposed additional tariffs on imports from China, Canada, and Mexico, sparking fears that these measures could trigger an all-out trade war, disrupt global trade, and slow economic growth—thereby hurting oil demand.

Adding to the pressure, the Organization of Petroleum Exporting Countries and allies (OPEC+) voted to increase production this week, albeit marginally. The cartel, which has removed over 5 million barrels per day from the market over the past two years to support prices, now signals the possibility of further production increases in the coming months.

Meanwhile, concerns over a larger-than-expected build in U.S. oil inventories have also weighed on sentiment. Data indicating a significant stockpile increase has raised worries that U.S. fuel demand may be softening amid slowing economic growth. The market remains cautious ahead of upcoming U.S. nonfarm payroll data for February, which could offer further clues on the economic outlook.

In this environment, trade tensions remain high: while Trump’s tariffs have prompted retaliatory measures from China, Canada, and Mexico, Mexico is expected to announce its own retaliatory steps on Sunday. These escalating trade disputes continue to cast a shadow over global energy markets.

Investors are also keeping a close watch on geopolitical developments, particularly the evolving situation in the Russia-Ukraine conflict. Despite the potential for a peace deal to ease supply disruptions, uncertainty surrounding the conflict—further compounded by the U.S. halting defense aid to Ukraine and delays in finalizing a materials deal between Kyiv and Washington—continues to add to market volatility.

Overall, oil prices are being driven down by a combination of tariff concerns, increased production by OPEC+ members, and signs of weaker demand, leaving the market in a state of cautious uncertainty.