Global oil prices remained largely stable on Friday but extended their decline for a second consecutive week as investor sentiment weakened further due to escalating trade tensions between the United States and China.
The prolonged dispute between the two largest economies has increased concerns over global growth prospects and diminished demand expectations in energy markets.
Brent crude oil, against which Nigerian oil is priced, fell by 3 cents to $63.30 per barrel while US West Texas Intermediate (WTI) crude edged up by 2 cents to $60.09 as of 09:27 a.m.
Despite the minor intraday movements, both benchmarks are set for weekly losses of 3.5% and 3%, respectively, following an 11% drop recorded last week.
Brent crude briefly dipped below $60 this week to its lowest level since February 2021.
The bearish sentiment followed China’s announcement of a 125% tariff on all US goods effective April 12.
The move came in response to the Trump administration’s recent decision to raise tariffs on Chinese imports to 145%.
Market participants have interpreted the tariff escalation as a signal that the trade conflict will persist with limited prospects for near-term resolution.
The dispute is expected to reduce global trade volumes and disrupt existing supply chains which could slow economic activity across multiple regions.
Analysts have raised concerns that the resulting slowdown would directly impact oil consumption in major markets, including China, the world’s largest importer of crude.
PVM Oil Associates analyst Tamas Varga noted that current price trends reflect a market driven more by geopolitical disruption than by core supply and demand fundamentals.
He said the loss of policy transparency has undermined investor confidence.
Further amplifying the negative outlook, the US Energy Information Administration revised its global growth forecasts downward on Thursday.
The agency cited increased trade risks and weaker economic indicators as primary reasons for reducing oil demand projections for both 2025 and 2026.
The EIA now expects lower consumption levels in the US and globally as a direct consequence of continued trade restrictions.
China’s economic growth for 2025 is also projected to slow, according to a Reuters poll. The deceleration is attributed to rising trade costs and uncertainties triggered by US tariffs.
A weaker Chinese economy could reduce its demand for crude oil and related energy products.
Analysts at ANZ Bank forecast that global oil consumption could decline by 1% if economic growth falls below 3%.
The bank’s senior commodity strategist, Daniel Hynes, said reduced global demand would put continued pressure on energy prices and limit any near-term recovery.
The ongoing price softness highlights how quickly market direction can shift in response to macroeconomic stress. Despite OPEC+ supply management efforts, broader geopolitical risk remains the key determinant of short-term price movement.
With no clear resolution in sight and political rhetoric intensifying between Washington and Beijing market participants are adjusting portfolios to reflect heightened volatility.
