Oil Trades at Three-Month Low as U.S. Launches Trade War and OPEC Boosts Output

Oil prices have plummeted to a three-month low as the U.S. launches a trade war with its major trading partners and OPEC+ decides to increase production. The escalating trade tensions and geopolitical uncertainties have sent oil prices tumbling, with West Texas Intermediate (WTI) crude futures settling below $73 per barrel and Brent crude futures trading slightly below $76 per barrel.



The U.S. tariffs on Canada and Mexico, which took effect on Tuesday, have added to the market's uncertainty. China's retaliatory tariffs on U.S. goods, including oil and liquefied natural gas, have further exacerbated the situation. The global trade war has led to a decrease in economic activity, which in turn has reduced demand for oil, putting downward pressure on prices.

OPEC+ has decided to increase production by 138,000 barrels per day (bpd) in April, with a gradual increase to 2.2 million bpd by September 2026. This decision comes amidst concerns about oversupply and the potential for a market glut. The production increase, coupled with the ongoing trade tensions and geopolitical uncertainties, has contributed to the decline in oil prices.

The U.S. sanctions on Iran and Venezuela have also played a role in the global oil supply and prices. The sanctions on Iran have significantly reduced its oil exports, while the sanctions on Venezuela have led to a decrease in its production and exports. OPEC+ has decided to increase production to help offset these supply disruptions and maintain market stability.

In conclusion, the escalating trade war between the U.S. and its major trading partners, coupled with OPEC+'s decision to increase production, has led to a significant decline in oil prices. The ongoing trade tensions and geopolitical uncertainties have contributed to the market's uncertainty, putting downward pressure on prices. The U.S. sanctions on Iran and Venezuela have also influenced global oil supply and prices, with OPEC+ playing a role in offsetting these supply disruptions. As the situation continues to evolve, investors and market participants should closely monitor the developments in the global oil market to make informed decisions.