Oil Prices Sink Over 3% Amid Escalating US-China Trade War Fears
- Brent and WTI crude prices fall over 3% as trade war rattles global demand outlook
- Markets fear deepening tariffs could push global economy into recession
- China imposes 34% retaliatory tariffs, intensifying investor concerns
- JPMorgan raises global recession probability to 60% by year-end
April 8, 2025 – Global oil markets slumped further on Monday as Brent crude and US West Texas Intermediate (WTI) extended their steep declines from last week, hit by mounting fears that the intensifying US-China trade war will sharply curb global economic growth and fuel demand.
Brent futures slid $2.10, or 3.2%, to settle at $63.48 a barrel, while WTI dropped $2.14, or 3.5%, to $59.85 per barrel as of 2227 GMT. These losses come on the heels of Friday’s 7% plunge, which saw both benchmarks reach their lowest levels in over three years.
The sharp selloff follows China’s aggressive response to President Donald Trump’s sweeping tariff measures, which included new 34% levies on US goods starting April 10. The tit-for-tat retaliation has heightened fears that the world’s two largest economies are now locked in a full-blown trade war — one that could severely impair global commerce and reduce energy consumption.
“The oil market is clearly pricing in a scenario where slowing trade will impact global manufacturing, shipping, and broader fuel use,” said an energy strategist at a New York-based investment firm. “This is no longer just about tariffs — it’s about the long-term risk to economic growth.”
Further stoking bearish sentiment, JPMorgan revised its global recession forecast, raising the probability of a worldwide economic downturn by year-end from 40% to 60%, citing increased market volatility and deteriorating trade conditions.
Crude oil, which is closely tied to industrial activity and consumer spending, is particularly sensitive to recession risks. The possibility of sustained weakness in global demand, combined with geopolitical uncertainty, is prompting hedge funds and institutional investors to reduce exposure to commodities.
Analysts now expect OPEC+ to closely monitor developments and consider whether fresh output cuts may be required to stabilize prices. However, any policy coordination may be complicated by the volatile macroeconomic backdrop and political dynamics in oil-producing nations.
With risk appetite diminishing and global energy markets under pressure, both producers and investors are bracing for a potentially turbulent quarter ahead.
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