Oil Prices Drop Amid Customs Duty Fears and OPEC+ Output Rise

Oil Prices Decline Amid Global Economic Concerns and Increased OPEC+ Production

Oil prices experienced a decline on Monday as investors grew wary of the potential repercussions of U.S. tariffs on global economic growth and fuel demand. Concurrently, an increase in production from OPEC+ contributed to the downward pressure on prices.

Brent crude futures decreased by 25 cents, or 0.4 percent, to $70.11 per barrel by 00:37 GMT, after rising 90 cents at the close of trading on Friday. West Texas Intermediate (WTI) crude also fell, down 28 cents or 0.4 percent, to $66.76 per barrel, following a 68-cent increase in the previous session.

Notably, WTI crude has now recorded a decline for seven consecutive weeks, marking its longest losing streak since November 2023, while Brent crude has decreased for the third week in a row. This market response follows U.S. President Donald Trump’s initial imposition of tariffs on major oil suppliers Canada and Mexico, followed by a postponement of those tariffs and a hike in taxes on Chinese goods.

In retaliation, China imposed tariffs on U.S. agricultural products, further complicating the trade landscape. According to Tony Sikammore from IG, "Crude oil prices fell last week due to uncertainty surrounding U.S. customs duties, concerns over growth in the United States, the possibility of lifting U.S. sanctions on Russia, and increased production from OPEC+."

Although oil prices inched back up on Friday after President Trump indicated that the U.S. would ramp up sanctions against Russia should it fail to achieve a ceasefire with Ukraine, the overall market sentiment remains cautious. The United States is also exploring options to ease sanctions on the Russian energy sector if a resolution to the conflict in Ukraine is reached.

The Organization of Petroleum Exporting Countries (OPEC) and its allies, collectively known as OPEC+, have announced plans to proceed with production increases starting in April. However, Russian Deputy Prime Minister Alexander Novak stated that OPEC+ might reconsider this decision if market conditions stabilize.

In a related development, President Trump expressed an interest in negotiating with Iran, a fellow OPEC member, to curb its nuclear ambitions—claims that Iran has denied. A U.S. State Department spokesperson confirmed that President Trump continues to pursue a "maximum pressure" strategy against Iran, particularly following the revocation of an exemption that allowed Iraq to pay for Iranian electricity.

Conversely, Iranian Supreme Leader Ayatollah Ali Khamenei reiterated that Iran would not be coerced into negotiations under current circumstances.

Summary of Oil Prices

The current market dynamics reflect a complex interplay of geopolitical factors, economic policies, and OPEC+ decisions, emphasizing the volatility of the oil market amidst shifting global trade relations.