Oil prices plunged on Thursday, with US crude dropping 7.63% to $66.25 per barrel and Brent crude falling 6.96%.
The sharp decline comes as President Donald Trump’s new tariffs raise recession fears and OPEC+ unexpectedly announces a significant production increase.
The White House escalated its trade war on Wednesday by imposing higher-than-expected tariffs on multiple economies, fueling concerns about global economic growth.
As a result, recession odds have surged to 53% on platforms like Kalshi, and traders are betting on Federal Reserve rate cuts to counteract the downturn.
David Morrison, senior market analyst at Trade Nation, explained that while energy imports remain largely unaffected by tariffs, investors fear the broader economic impact on global trade and demand.
Adding to the pressure, OPEC+ revealed plans to increase crude production by 411,000 barrels per day next month—three times more than previously expected.
The decision, aimed at penalizing members who failed to comply with prior production limits, could exacerbate worries about oversupply, especially if a global slowdown reduces energy demand.
Although the move aligns with Trump’s push for lower oil prices, it raises concerns of a potential supply glut that could further destabilize energy markets.
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