Brent crude prices have experienced a decline of over 3%, reaching their lowest point since 2021. Oil prices approached their lowest closing levels since the height of the coronavirus pandemic in 2021 on Friday, impacted by U.S. President Donald Trump’s announcement of new tariffs and increased output from the OPEC+ producer group. Brent futures experienced a significant decline, dropping $2.29, or 3.3%, to settle at $67.85 a barrel as of 0948 GMT. West Texas Intermediate crude futures in the U.S. experienced a significant decline, dropping by $2.32, which represents a 3.5% decrease, bringing the price down to $64.63. Both benchmarks are poised to record their largest weekly losses in percentage terms in the past six months.
The tariff announcement by Trump on Wednesday had a detrimental effect on crude prices, but the repercussions were even more pronounced in other sectors. In a swift response to the unfolding news, investors flocked to the security of bonds, the Japanese yen, and gold, causing significant turbulence in global financial markets. The dollar index, which gauges the performance of the U.S. currency relative to six other currencies, has declined to 102.98, marking its lowest point since mid-October. According to oil broker PVM’s John Evans, the combination of Trump’s tariffs and the OPEC+ output increase has left “the oil complex with little choice but to succumb to a level of selling not witnessed since the pandemic’s collapse,” as noted in his recent commentary.
The recent sell-off in oil prices can be attributed to a strategic decision by the Organization of the Petroleum Exporting Countries and its allies, collectively referred to as OPEC+. The group has revised its output plans, now targeting an increase of 411,000 barrels per day (bpd) in May, a significant rise from the earlier projection of 135,000 bpd. Exemptions from Trump’s extensive new tariffs have been granted to imports of oil, gas, and refined products. However, these policies may lead to inflationary pressures, hinder economic growth, and escalate trade disputes, ultimately impacting oil prices.
Analysts at Goldman Sachs have made significant reductions to their December 2025 price targets for Brent and WTI crude oil, lowering them by $5 each to $66 and $62, respectively. “The bank’s head of oil research, Daan Struyven, indicated in a recent note that the risks associated with the lowered oil price forecast are skewed towards the downside, particularly for 2026. This outlook is influenced by increasing recessionary concerns and, to a lesser degree, the potential for higher OPEC+ supply.”
Analysts at Rystad Energy have indicated that oil prices may experience a rebound in the upcoming months. “According to Mukesh Sahdev, Rystad’s global head of commodity markets, potential supply disruptions resulting from sanctions and tariffs affecting both sellers and buyers suggest that oil prices are unlikely to remain below $70 for an extended period.”