Oil prices fell on Monday due to escalating worries that the ongoing trade war between the United States and China could hinder global economic growth and diminish fuel demand, APA-Economics reports citing Middle East Economy.
Brent crude futures were down 29 cents, or 0.45 percent, at $64.47 a barrel at 01:26 GMT. Meanwhile, U.S. West Texas Intermediate crude futures traded at $61.23 a barrel, down 27 cents, or 0.44 percent. Both contracts have experienced a decline of about $10 a barrel since the beginning of the month, as tensions between the world’s two largest economies have intensified.
Goldman Sachs anticipates that Brent will average $63 and WTI will average $59 for the remainder of 2025. Furthermore, it projects Brent to average $58 and WTI $55 in 2026. The firm predicts that global oil demand in the fourth quarter of 2025 will rise by only 300,000 barrels per day year-on-year, “given the weak growth outlook,” according to a note by analysts led by Daan Struyven. This demand slowdown is expected to be particularly pronounced for petrochemical feedstocks.
In a significant move, Beijing raised its tariffs on U.S. imports to 125 percent on Friday, retaliating against President Donald Trump’s decision to impose higher duties on Chinese goods. This escalation in the trade war poses a threat to global supply chains. On Saturday, Trump approved exclusions from steep tariffs on smartphones, computers, and other electronics primarily imported from China. However, U.S. Commerce Secretary Howard Lutnick indicated on Sunday that critical technology products from China would face new duties within the next two months, alongside semiconductors.
The trade war has intensified concerns that unsold exports could continue to drive domestic Chinese prices downward. “Inflation data from China were a window into an economy that is not in shape for a trade fight. Consumer prices fell for a second month in a row in year-on-year terms, while producer prices chalked up their 30th straight fall,” reported Moody’s Analytics in a weekly note, referencing data released on April 10.
As companies brace for a potential decline in demand, U.S. energy firms cut oil rigs last week by the most in a week since June 2023. This reduction lowered the total oil and natural gas rig count for a third consecutive week, according to a report by Reuters citing energy industry company Baker Hughes.
In a development that could lend support to oil prices, U.S. Energy Secretary Chris Wright stated on Friday that the United States might halt Iran’s oil exports as part of Trump’s strategy to pressure Tehran regarding its nuclear program. Both countries engaged in positive and constructive talks in Oman on Saturday, agreeing to reconvene the following week to address Tehran’s escalating nuclear ambitions, as officials noted over the weekend.
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