Oil Prices Decline Following Increased Supply and Tariff Implementations
Oil prices experienced a decline on Wednesday as Asian markets opened, influenced by OPEC Plus’s recent decision to boost oil supply and the implementation of tariffs on imports from Mexico and Canada.
North Sea Brent crude saw a decrease of 15 cents, settling at $70.89 per barrel, while Texas light sweet crude fell 11 cents to $69.75 per barrel.
Analysts from City Bank indicated that “the increase in oil supply by producers, coupled with weakening US economic indicators, is primarily responsible for the decline in oil prices.”
In a significant policy shift, the OPEC Plus coalition announced on Monday its decision to supply additional oil for the first time since 2022. Beginning in April, the coalition plans to increase output by 138,000 barrels per day, marking a notable departure from its previous daily reduction strategy of 6 million barrels, a policy maintained since last year.
Additionally, former President Donald Trump has enacted a series of tariffs, imposing a 25 percent levy on all imported goods from Mexico, a 10 percent customs fee on energy imports from Canada, 25 percent on other Canadian goods, and a 20 percent tariff on products from China.
Experts suggest that the implementation of these tariffs by the US administration could negatively impact the oil market by diminishing overall demand for crude oil.
