Crude oil prices recorded their steepest monthly decline in over three years in April as a combination of intensifying U.S.-China trade tensions, rising inventories and uncertainty over OPEC+ supply strategy weighed heavily on market sentiment.
Brent crude oil, the international benchmark for Nigerian oil, dropped by 15% in April to close at $63.76 per barrel while U.S. West Texas Intermediate (WTI) fell by 16% to $60.02 per barrel.
The selloff accelerated following the announcement by U.S. President Donald Trump on April 2 of sweeping tariffs on all Chinese imports.
The subsequent retaliatory levies from China escalated the trade dispute between the world’s two largest oil-consuming nations.
According to a Reuters poll, the increased tariff burden has raised the probability of a global recession within the year. This is evident in China’s factory activitythat contracted at the fastest pace in 16 months, while U.S. consumer confidence declined to a near five-year low in April.
Market analysts have warned that weakening macroeconomic indicators signal declining fuel demand growth in both industrial and consumer segments, a development that has already begun to reflect in price action.
“The trade conflict between the U.S. and China has altered the demand equation for crude in the near term. With industrial output softening in key markets and logistics activity slowing, the demand recovery is now at risk,” analysts at PVM said in a client note.
Adding to bearish sentiment, supply-side concerns have also intensified. Sources within the Organization of the Petroleum Exporting Countries and its allies (OPEC+) revealed that several members are expected to propose a second consecutive output hike when the group meets on May 5 to review production strategy.
OPEC+ has struggled to maintain internal cohesion amid growing pressure from members to raise production quotas in response to geopolitical negotiations in regions like Ukraine and Iran, which may lead to additional barrels entering the market in the near term.
“The very real possibility that OPEC+ will continue to bring extra barrels to the market as it fights to keep order within its ranks is added to the diplomatic thrusts in Ukraine and Iran, which if successful means more international crude on the water at a time when a trade war will squash any hope of demand growth,” PVM added.
Further compounding the pressure on prices, U.S. crude oil inventories increased by 3.8 million barrels last week, according to data from the American Petroleum Institute.
Analysts surveyed by Reuters had expected a modest build of 400,000 barrels, highlighting the gap between supply expectations and actual stock movements.
Official inventory data from the U.S. Energy Information Administration (EIA) is scheduled for release at 10:30 a.m. ET (1430 GMT) and will offer further insight into near-term supply dynamics.
Despite a temporary rebound following White House efforts to soften the impact of proposed auto tariffs, oil markets remain fragile.
Investor caution remains elevated amid geopolitical risk, weak economic data, and a lack of clarity on coordinated production policy.
