On Wednesday, April 16, oil prices began to decline sharply, a result of the new tariff policy from the United States, which has added further uncertainty to the markets. Traders express concerns about the repercussions of the trade war between the US and China, which could significantly impact global economic growth and demand for energy resources.
This is reported by Finway
The price of Brent crude oil fell by 18 cents, or 0.3%, to $64.49 per barrel, while US WTI crude dropped by 16 cents to $61.17. It is worth noting that both indices had already lost 0.3% on Tuesday.
Oil Demand Forecast for 2025
The International Energy Agency (IEA) forecasts that oil demand will grow at the slowest rate in the last five years by 2025. A decline in US oil production is also possible due to the new tariffs imposed by former President Donald Trump. The corresponding actions of trading partners only complicate the situation.
“Investors continue to struggle to find a catalyst for a more significant recovery, as global growth is expected to slow due to US tariffs, which threatens oil demand,” said IG market strategist Yeap Jun Rong.
He also emphasized that the trend of falling oil prices remains stable, and it is expected that the initial optimism regarding the removal of tariffs will fade, while major macroeconomic issues related to upcoming economic data may bring the markets back to a more realistic outlook.
The Impact of Tariffs on the Oil Market
The IEA predicts that oil demand will increase by 730,000 barrels per day this year, a significant reduction compared to the previous forecast of over one million barrels. This decline exceeds the reduction announced by OPEC on Monday.
Tetsu Emori, director of Emori Fund Management, noted that if the stock markets recover, oil prices could rise. He believes that if the stock market, currently under pressure from tariffs, rebounds, we may see an increase in oil prices. However, without such a recovery, prices are likely to remain around $60.
Already this month, the price of black gold has decreased by 13% due to US trade restrictions and increased oil production under OPEC+. Many banks, including UBS, BNP Paribas, and HSBC, have lowered their oil price forecasts due to the escalation of the tariff conflict.
Recall that the Trump administration imposed new tariffs on Chinese goods, reaching record levels, to which China responded by introducing its own restrictions on US imports, raising fears of a global recession.
Another alarming signal is China’s order to halt deliveries of Boeing aircraft, in response to Washington’s decision to raise tariffs on Chinese goods to 145%. Meanwhile, US crude oil inventories rose by 2.4 million barrels last week, while gasoline stocks decreased by 3 million barrels, and distillate stocks fell by 3.2 million barrels.