[WORLD] Oil prices fell by almost 1% on Thursday as US President Donald Trump escalated a trade fight with China while also announcing a 90-day halt on tariffs aimed at other countries. Brent prices declined 73 cents, or 1.1%, to $64.73 per barrel at 01:08 a.m. GMT, while U.S. West Texas Intermediate crude futures fell 49 cents, or 0.8%, to $61.86. The benchmarks closed 4% higher on Wednesday, after falling as much as 7% throughout the day.
The volatility in oil markets reflects broader investor unease over escalating trade tensions, which threaten to disrupt global supply chains and dampen energy demand. Analysts warn that prolonged disputes could weigh heavily on economic growth, particularly in emerging markets that are key drivers of oil consumption.
Trump increased the tariff rate on China to 125%, starting immediately, from the previously stated 104% duty that took effect earlier on Wednesday.
The abrupt tariff hike comes amid stalled negotiations between Washington and Beijing, with both sides yet to schedule further talks. Market participants are closely monitoring whether China will retaliate with additional measures, such as restricting U.S. energy imports, which could further roil commodity markets.
China also imposed an extra import duty on US goods, imposing an 84% tariff effective Thursday. Meanwhile, U.S. oil stocks increased by 2.6 million barrels in the week ending April 4, according to the Energy Information Administration, nearly doubling the 1.4-million-barrel increase predicted in a Reuters poll.
The unexpected inventory build added pressure to prices, reinforcing concerns about oversupply despite ongoing OPEC+ production cuts. Some traders speculate that weaker-than-expected demand, partly linked to trade tensions, may be contributing to the surplus.
The Keystone oil pipeline from Canada to the United States remained closed on Wednesday due to an oil spill near Fort Ransom, North Dakota, while plans to resume service were being considered, according to its operator, South Bow.
The pipeline outage has temporarily tightened supply in the Midwest, though its impact on global prices remains limited. However, prolonged disruptions could exacerbate regional price differentials and strain storage capacity, particularly as refinery maintenance season winds down.
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