Crude markets rattle as President Trump’s sweeping tariffs spark inflation concerns, raise global demand uncertainty, and overshadow U.S. inventory build.
Washington, April 3:
Oil prices swung wildly and ultimately fell into negative territory following President Donald Trump’s dramatic announcement of reciprocal tariffs on major U.S. trading partners. The tariffs, part of Trump’s self-declared “Liberation Day”, sent shockwaves through commodity markets, as traders feared a severe hit to global economic growth and energy demand.
Brent crude, which earlier gained $1 post-settlement, slipped to close just 46 cents higher at $74.95 per barrel, while WTI crude futures dropped from a $1 gain to end at $71.71, before dipping lower in after-hours trade.
📉 Oil Rally Reversed During Trump Speech
Prices initially spiked on bullish momentum, only to retreat rapidly during Trump’s Rose Garden speech, where he unveiled a 10% baseline tariff on all imports and much higher rates on specific nations—34% on China, 26% on India, and 24% on Japan.
Also Read: Markets Panic: Stocks Slide, Gold Hits Record High After Trump’s Tariff Shock
Markets were rattled by Trump’s threats of further oil sanctions, including:
- Secondary tariffs on Russian crude
- Toughened sanctions on Iranian exports
🌍 Global Trade Tensions Disrupt Oil Sentiment
Commodity experts say the fear of an extended trade war may suppress global energy demand, offsetting recent supply risks and sanctions-led shortages.
Also Read: “A Little Tough Love”: Trump’s Tariff Talk Sends Shockwaves Through Global Markets
“Crude prices have paused last month’s rally… Trump’s tariff shock has overshadowed supply-side tightness,”
said Ole Hansen, Head of Commodity Strategy at Saxo Bank.
🛢️ Russia Adds to Supply Concerns
On the supply front, Russia—world’s #2 oil exporter—suspended a major Black Sea mooring at Novorossiisk, just a day after halting key pipeline loadings from Kazakhstan. With 9 million barrels per day in output, Russia’s export logistics disruptions added further volatility.
📊 US Inventories Build, But Traders Look Elsewhere
The U.S. Energy Information Administration (EIA) reported a surprise inventory surge of 6.2 million barrels last week. However, the market reaction remained muted.
“The crude build seems driven by a sharp rise in Canadian imports, likely in anticipation of tariffs,”
said Giovanni Staunovo, UBS commodities analyst.
Despite the bearish data, prices were more influenced by macroeconomic fears and geopolitical uncertainty.
🇲🇽 Mexico and Canada’s Measured Response
Interestingly, Mexico and Canada, major U.S. oil suppliers, were not listed on Trump’s tariff chart, easing some immediate concerns. Mexican President Claudia Sheinbaum confirmed Mexico won’t retaliate with tariffs—yet.
🔮 Outlook: Turbulence Ahead
Analysts say oil may remain volatile as markets assess:
- Impact of tariffs on global trade
- Further moves from China, India, and EU
- Supply chain disruptions from Russia and Iran
- Possibility of a global demand slowdown
With U.S. inflation fears mounting and recession chatter intensifying, energy traders may continue fleeing to safe havens, leaving crude vulnerable in the near term.
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Trump tariffs, oil prices, Brent crude, WTI futures, US-China trade war, global energy demand, Russia oil exports, Iranian sanctions, Novorossiisk, Canada oil exports, Mexico oil policy, US crude inventories, trade war 2025, energy market volatility, crude oil collapse