International oil prices nosedived more than 6% on Thursday.
The sharp decline was triggered by U.S. President Donald Trump’s announcement of reciprocal tariffs after the market closed the previous day, sparking concerns that the global economy could be pushed into recession and lead to a dramatic slowdown in oil demand.
Additionally, the Organization of the Petroleum Exporting Countries (OPEC) +’s announcement of increased production also contributed to the drop in oil prices.
OPEC+’s eight major oil-producing countries agreed to increase their daily output by 411,000 barrels per day starting in May.
Brent crude, the international oil benchmark, saw its June delivery price plummet by $4.81 (6.42%) to $70.41 per barrel.
Similarly, West Texas Intermediate (WTI), the U.S. oil benchmark, dropped by $4.76 (6.64%) to settle at $66.95 per barrel.
As Trump’s tariffs turned the worst-case scenario into reality, panicked investors triggered a sell-off, causing oil prices to tumble.
Fears are mounting that the U.S. economy could face stagflation, with rising prices and declining growth rates.
JP Morgan cautioned that Trump’s tariffs could push the average U.S. tariff rate up to 25%, potentially causing the Consumer Price Index (CPI) inflation rate to surge by nearly 2 percentage points. This warning suggests that the CPI, which rose 2.8% year-over-year in February, could rise to 4.8%.
