Oil prices fell to their lowest in nearly three months in Asian trade on Tuesday, as concerns mounted about the economic disruption caused by rising US trade tariffs and the possibility of additional OPEC+ output.
Oil has not been resting this week as the world’s largest economies threatened to escalate their trade war. Concerns also rose about the potential for further economic pressure on the world’s largest oil importer after the US president raised tariffs on China to 20%.
The Organisation of the Petroleum Exporting Countries and its allies (OPEC+) said it would raise output in April, adding to concerns about a supply glut. On Monday, it announced 25% tariffs on Canada and Mexico after raising tariffs on China to 20%. All three tariffs are set to take effect late on Tuesday.
News of the tariffs has rattled financial markets, and oil prices are no different. Markets were concerned that delays in international trade could hamper economic expansion, negatively impacting oil demand.
The tariffs on China have been a major concern for the oil industry as they pose additional economic challenges for the world’s largest oil importer. In addition, China is expected to escalate the trade war with the United States by retaliating with its own trade measures.
