Oil prices plunged on Monday, hitting their lowest levels in four years, driven by concerns about economic fallout following former U.S. President Donald Trump’s decision to impose massive tariffs on America’s trading partners. The global oil market reacted strongly to these developments, which combined with other factors to cause significant price declines.
Brent crude, the global oil benchmark, fell 3.5% to $63.30 per barrel, while West Texas Intermediate (WTI), the U.S. benchmark, also dropped 3.5% to $59.84 by 4:16 a.m. ET. These price levels represent the lowest since early 2021, when the global economy was still reeling from the effects of the COVID-19 pandemic.
The sharp drop in oil prices comes after OPEC+, a coalition of the world’s leading oil producers, surprised investors last week by agreeing to a much larger increase in oil supply than initially planned. Saudi Arabia, Russia, and six other members of the group decided to raise oil production starting in May, intensifying concerns about oversupply in the global market. The move from OPEC+ has added to the market uncertainty, compounding fears of an economic slowdown due to the tariff measures imposed by Trump, which are expected to disrupt global trade.
The combination of economic uncertainty, rising production levels, and geopolitical tensions have created a volatile environment for oil prices, making it unclear when they will stabilize.
