(Investing) – Oil prices have plummeted to their lowest levels in more than three years, as China retaliates against President Trump’s tariffs, intensifying the ongoing trade war and unsettling global markets.
Brent Oil Futures dropped 7.6% to $64.86 a barrel at 14:05 GMT, while Crude Oil WTI Futures fell 8.4% to $61.34 a barrel.
“We leave our forecasts unchanged until further clarity emerges, sticking with our $67.5/bbl Brent forecast for 2H25 for now,” Morgan Stanley commodity strategists said.
Fawad Razaqzada, a market analyst at Forex.com, noted that risk appetite has suffered another significant blow as China responded with new tariffs of its own. Although imports of oil, gas, and refined products were not included in Trump’s tariff plan, traders are concerned that the levies could trigger inflation and slow economic growth, which would negatively affect demand for crude.
The sell-off was also driven by the unexpected decision by OPEC+ to triple the amount of oil supply next month. This move has added to the downward pressure on oil prices.
According to JPMorgan, the Trump administration has shown a strong preference for lowering crude prices. In their 2025 outlook, they predicted that weak oil supply-demand fundamentals could help achieve this goal without any intervention from the administration.
The bank anticipated a large surplus and an average Brent price of $73, with a year-end price of $64.
In 2026, JPM expects continued surpluses to push Brent prices below $60 by the end of the year, with an average Brent forecast of $61 and WTI at $57.
These forecasts are based on the assumption that Saudi Arabia and Russia will maintain their current production levels within OPEC+. However, the sustainability of low volumes at low prices is questionable, and increased oil production may become a key consideration for some OPEC members.
