- 09
- Apr.
- 2025
Beijing is the world’s largest importer of oil, while Washington remains the top consumer. Therefore, the price of oil is highly influenced by the economic performance of these two dominant global powers.
Oil prices plunged on Wednesday due to the escalating trade war between the United States and China, with Brent crude falling below $60 per barrel for the first time in four years.
At around 11:20 GMT (13:20 in Paris), the price of North Sea Brent crude for June delivery dropped by 5.52% to $59.35, briefly reaching a low of $58.47 during the session—the lowest since February 2021.
Its US counterpart, West Texas Intermediate (WTI) for May delivery, fell by 5.86% to $56.09.
Since Wednesday, US President Donald Trump has imposed a new round of import tariffs. The main target is Chinese goods, which now face an additional 104% in tariffs under Trump's administration. In response, China announced on Wednesday that it would raise its retaliatory tariffs on US products to 84%.
“Oil prices continued to decline, as traders brace for a severe impact on global growth and energy demand,” says Susannah Streeter, an analyst at Hargreaves Lansdown.
John Plassard, an analyst at Mirabaud, believes that “the drop in oil prices reflects skepticism about a short-term de-escalation.”
Drop in Demand
Concerns over a weakening global demand for oil, combined with last week’s decision by the Organization of the Petroleum Exporting Countries (OPEC) and its allies (OPEC+) to ramp up production more quickly than expected, “have created a toxic mix that fuels fears of an oversupplied oil market,” says Ole R. Hvalbye, an analyst at SEB.
A price that is too low for oil clashes with the US president’s goal of “drilling at full speed” in the United States. “If prices drop further, production will be halted, as it will no longer be profitable for US producers,” explains Tamas Varga of PVM Energy.
Furthermore, European gas prices, weakened by concerns over lower demand due to the trade war initiated by Donald Trump, dropped to their lowest level since last September, at €33.44 per megawatt-hour (MWh) on Wednesday.
Around 11:20 GMT, the Dutch TTF futures contract, the European benchmark for natural gas, was down approximately 5.8%, at €34.10 per megawatt-hour.
Goldman Sachs
Goldman Sachs predicts that Brent and WTI prices will be $62 and $58 per barrel, respectively, in December 2025, and $55 and $51 in December 2026, based on two scenarios.
In a note dated April 7, the bank states that the first scenario assumes the US economy avoids a recession due to a significant reduction in tariffs, set to take effect on April 9. Additionally, it anticipates a moderate increase in supply from the eight OPEC+ countries, with two final increases of 130,000-140,000 barrels each in June and July.
However, the bank underlined that under a typical US recession and its baseline scenario for OPEC, it expects Brent prices to drop to $58 by December 2025 and $50 by December 2026. Goldman Sachs also indicated that oil prices could surpass its forecasts in the event of a sharp reversal in tariff policies.
Brent Falls Below $40 a Barrel
On Monday, Goldman Sachs once again downgraded its average annual price forecasts for Brent and WTI in 2026, citing increased recession risks and the potential for higher-than-expected supply from OPEC+. US President Donald Trump escalated his tariff threats against China, while the European Union unveiled retaliation plans, further heightening concerns of a prolonged trade war that could push the global economy into recession.
Finally, Goldman Sachs stated that in a scenario of global GDP slowdown, with OPEC’s baseline data unchanged, Brent prices are expected to drop to $54 by December 2025 and $45 by December 2026. The bank also predicted that in a more extreme, though less likely, scenario involving a global GDP slowdown and a full unwind of OPEC+ production cuts, which would curb non-OPEC supply, Brent prices could fall to just below $40 per barrel by the end of 2026.
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