Crude oil prices continued downward on Monday as trade tensions between the United States and China raised concerns over a global economic slowdown.
The decline pushed prices to their lowest levels since April 2021 with investor sentiment weakening on fears of reduced demand and oversupply.
Brent crude oil, against which Nigerian oil is priced, dropped $2.54 or 3.9% to $63.04 per barrel at 8:45 a.m. Nigerian time while U.S. West Texas Intermediate (WTI) crude fell by $2.50, or 4.03% to $59.49 per barrel.
Last Friday, China imposed new tariffs of up to 34% on American goods in retaliation to the U.S. administration’s latest tariff package, escalating the ongoing trade dispute between the world’s two largest economies.
While energy imports, including oil and gas, were exempted from the latest tariffs, analysts warned that the broader economic implications could significantly weigh on energy demand.
Oil markets had already recorded substantial losses last week, with Brent dropping 10.9% and WTI falling 10.6%.
The added pressure from renewed tariff tensions has deepened concerns about a potential global recession.
“It’s hard to see a floor for crude unless the panic in the markets subsides,” said Vandana Hari, founder of oil market analysis firm Vanda Insights. “And it’s hard to see that happening unless Trump says something to arrest snowballing fears over a global trade war and recession.”
In addition to trade-related fears, oil prices came under further pressure following a decision by the Organization of the Petroleum Exporting Countries and its allies (OPEC+) to increase output more aggressively than previously planned.
The group now aims to return 411,000 barrels per day (bpd) to the market in May, significantly above the previously scheduled increase of 135,000 bpd.
“This potential influx of supply, reversing cuts maintained over the past two years, represents a major shift in market dynamics and acts as a significant headwind for prices,” said Sugandha Sachdeva, founder of SS WealthStreet.
OPEC+ ministers over the weekend reiterated the importance of full compliance with output quotas and directed overproducing member states to submit plans by April 15 detailing how they intend to compensate for previous excess production.
On the monetary policy front, U.S. Federal Reserve Chair Jerome Powell stated on Friday that the newly announced tariffs were “larger than expected” and that the resulting economic impact—including increased inflation and slower growth—was likely to be more significant than previously forecast.
Meanwhile, geopolitical risks also remain elevated. On Sunday, Iran rejected U.S. demands to resume direct nuclear talks, raising fears of further instability in the Middle East.
In Europe, Russia announced that it had taken control of Basivka in Ukraine’s Sumy region and was advancing military operations in nearby settlements.
