Global oil prices have taken a hit as U.S. crude fell below $60 per barrel for the first time in several years, driven by mounting fears of a global economic slowdown linked to President Donald Trump’s tariff policies.
On Monday, West Texas Intermediate (WTI) crude declined by 2.08%, closing at $60.70 per barrel, while Brent crude dropped 2.09%, settling at $64.21. These losses extend the steep declines seen last week, with crude prices falling over 15% since Wednesday.
The Trump administration’s decision to impose sweeping tariffs on imports has sparked concerns about the economic impact of trade tensions. While oil and gas imports are exempt from these tariffs, the indirect effects on global commerce and manufacturing are expected to dampen demand for energy.
Economists warn that higher tariffs could lead to increased costs for businesses, reduced consumer spending, and ultimately a recession in both the United States and other major economies.
JPMorgan recently raised its probability of a U.S. recession this year to 60%, up from 40%, citing the likely fallout from trade policies. Goldman Sachs also lowered its oil price forecast for December 2025, projecting U.S. crude to average $58 per barrel, with further declines anticipated in 2026.
Adding to the downward pressure on oil prices is the decision by OPEC+ producers to ramp up production in response to improving market conditions earlier this year. The group plans to reverse its voluntary output cuts of 2.2 million barrels per day gradually over the next year and a half, with an additional 411,000 barrels per day expected in May alone. Saudi Aramco further intensified competition by reducing the price of its flagship Arab Light crude.
This increase in supply comes at a time when demand growth is expected to slow significantly due to economic uncertainties. Bank of America has warned that rising OPEC+ production combined with weaker demand could create a surplus of 1.25 million barrels per day this year, further depressing prices.
The prolonged decline in oil prices is placing immense pressure on U.S. shale producers, many of whom rely on higher price points to remain profitable. Analysts view $60 per barrel as a critical threshold for shale operations; prices below this level often lead to reduced drilling activity and production cuts.
Lower oil prices may offer relief to consumers through reduced fuel costs but pose serious challenges for energy-dependent economies and industries worldwide. The Organisation of the Petroleum Exporting Countries (OPEC) has stated that its production increases will remain flexible and responsive to market conditions, but analysts remain sceptical about whether these measures will be sufficient to stabilise prices amid ongoing trade tensions and fears of recession.