Tariffs and OPEC Shake Global Energy Markets, Crude Prices Crash

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The market downturn is extending beyond stocks, with the latest US tariffs pushing crude oil prices to a seven-month low. US crude dropped 7.63% to $66.25 per barrel, while Brent crude fell 6.96%. This decline is driven by the combination of escalating trade tensions, with President Trump’s recent tariffs heightening fears of economic slowdown. 

Recession risks are now seen at 53%, according to betting markets like Kalshi, and traders are betting on interest rate cuts to mitigate the impact. This uncertainty is influencing oil markets, as the anticipated global economic damage from the tariffs could reduce energy demand.

Adding to the pressure, OPEC+ announced that eight of its members would increase oil production by 411,000 barrels per day next month. This increase is three times what was previously expected, as the group seeks to penalize members not adhering to production quotas. While the boost in output may align with Trump’s call for lower oil prices, it could fuel concerns about a global oversupply, particularly if a recession dampens energy demand.

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