Oil prices fall amid trade fears, supply surplus expectations

ISTANBUL

Oil prices plummeted further on Wednesday as demand concerns intensified following US President Donald Trump's new tariffs on China and expectations of increased global supply.

International benchmark Brent crude dropped by around 0.14%, trading at $61.27 per barrel at 9.39 a.m. local time (0639 GMT), down from $61.36 at the previous session's close.

US benchmark West Texas Intermediate fell about 0.12%, settling at $57.83 per barrel, compared to its prior session close of $57.90.

Prices fell as US President Donald Trump's sweeping global tariffs officially took effect early Wednesday, including a staggering 104% tariff on Chinese imports, escalating trade tensions with major partners across Asia and Europe.

The reciprocal tariffs, part of Trump's newly launched global trade framework, were implemented at 12.01 a.m. Eastern Time (0401 GMT), targeting dozens of countries.

While China bore the highest rate, other nations were also hit hard – Cambodia with 49%, Vietnam 46%, Thailand 36%, Pakistan 29%, India 26%, South Korea 25%, and Japan with 24%.

The White House had initially announced a 34% tariff on Chinese goods. However, White House spokesperson Karoline Leavitt confirmed on Tuesday that the rate had been more than tripled to 104% as a "necessary correction to years of unfair trade."

China vowed to "fight to the end," amid Trump's new threat of imposing another 50% duty on Chinese imports.

Beijing is expected to announce retaliatory measures soon, but Japan and South Korea have stated they will pursue negotiations rather than immediate countermeasures.

Nearly 70 countries have already reached out to Trump to begin negotiations on tariffs following his announcement last week, according to Leavitt.

Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, announced they will accelerate their planned production increase to 411,000 barrels per day in May, equivalent to a three-month rise, further supporting the price decline.

"The move is likely to push market balances into surplus," Daniel Hynes, a senior commodity strategist at the Australia and New Zealand Banking Group, said in a note.

Goldman Sachs predicts Brent crude will fall to $62 a barrel and WTI to $58 by December 2025, further declining to $55 and $51, respectively, by December 2026.

Meanwhile, the American Petroleum Institute (API) data showed that US crude oil inventories fell by 1.05 million barrels last week compared to the previous one.

This decline slightly eased demand concerns in the world's top oil-consuming nation, limiting the downward pressure on prices.

The US Energy Information Administration (EIA) is expected to release official inventory data later today.