Oil dives more than 6%, steepest fall in 3 years

HOUSTON – Oil prices swooned on Thursday to settle with their steepest percentage loss since 2022, after OPEC+ agreed to a surprise increase in output the day after US President Donald Trump announced sweeping new import tariffs

Brent futures settled at USD 70.14 a barrel, down USD 4.81, or 6.42%. US West Texas Intermediate crude futures finished at USD 66.95 a barrel, down USD 4.76, or 6.64%.

Brent was on course for its biggest percentage drop since August 1, 2022, and WTI its biggest since July 11, 2022.

At a ministers’ meeting on Thursday, OPEC+ countries agreed to advance their plan for oil output hikes, now aiming to return 411,000 barrels per day to the market in May, up from 135,000 bpd initially planned.

“The economy and oil demand are inextricably linked,” said Angie Gildea, KPMG US energy leader.

“Markets are still digesting tariffs, but the combination of increased oil production and a weaker global economic outlook puts downward pressure on oil prices – potentially marking a new chapter in a volatile market.”

Oil prices were already trading some 4% lower prior to the meeting, with investors worried Trump’s tariffs would escalate a global trade war, curtail economic growth and limit fuel demand.

Trump on Wednesday unveiled a 10% minimum tariff on most goods imported to the US, the world’s biggest oil consumer, with much higher duties on products from dozens of countries.

Imports of oil, gas and refined products were exempted from the new tariffs, the White House said on Wednesday.

UBS analysts on Wednesday cut their oil forecasts by USD 3 per barrel over 2025-26 to USD 72 per barrel.

Traders and analysts now expect more price volatility in the near term, given the tariffs may change as countries try to negotiate lower rates or impose retaliatory levies.

“Countermeasures are imminent and judging by the initial market reaction, recession and stagflation have become terrifying possibilities,” said PVM analyst Tamas Varga.

“As tariffs are ultimately paid for by domestic consumers and businesses, their cost will inevitably increase, impeding the rise in economic wealth,” Varga said

Further weighing on market sentiment, US Energy Information Administration data on Wednesday showed US crude inventories rose by a surprisingly large 6.2 million barrels last week, against analysts’ forecasts for a decline of 2.1 million barrels.

(Reporting by Erwin Seba in Houston, Robert Harvey in London, Siyi Liu in Singapore, Nicole Jao in New York and Arunima Kumar in Bengaluru; Editing by Christian Schmollinger, Christopher Cushing, Ed Osmond, Jan Harvey, Tomasz Janowski and Joe Bavier)