Oil prices extended their decline on Monday, tumbling nearly 3% to reach levels not seen since 2021, as an intensifying U.S.–China trade dispute sent shockwaves through global commodity markets. The rout, which also dragged down base metals and agricultural products, reflects mounting investor anxiety over the prospect of a worldwide economic slowdown.

In Asian trading, major equity benchmarks fell sharply after White House officials reaffirmed plans for sweeping tariffs on Chinese imports, fuelling expectations that recessionary pressures could prompt the Federal Reserve to begin cutting interest rates as early as May. ANZ analysts warned that “the biggest threat to the global goods trading system since World War II is forcing a rapid deleveraging in risk assets and escalating recession risks.”

Last Friday, Beijing announced retaliatory duties of up to 34% on a wide range of U.S. goods, confirming fears that a full‑blown trade war is under way and threatening to curb demand for raw materials. Against this backdrop, both Brent crude and West Texas Intermediate futures have fallen more than 10% over the past week, touching their weakest levels since April 2021.

“Tariff‑driven demand concerns are the primary driver of the decline,” said Satoru Yoshida, commodity strategist at Rakuten Securities. He added that a planned production increase by OPEC+ is exacerbating selling pressure, and that further retaliatory measures beyond China could deepen the downturn.

Base metals suffered steep losses: London Metal Exchange copper plunged over 6% to a near 17‑month low before recovering modestly later in the session, while onshore Shanghai copper futures slid 6%, marking their sharpest drop in more than three months. Japanese rubber contracts fell to their weakest since February 2024, and Malaysian palm oil futures declined for a third consecutive session.

Even gold, which hit record highs last week as investors sought a safe haven, surrendered gains amid the broader sell‑off. Traders liquidated bullion to meet margin calls and offset losses elsewhere, underscoring the depth of market unease as the global economy braces for the fallout from escalating trade tensions.