Oil containers are seen in a field on April 07, 2025 in Yorktown, Texas.
Brandon Bell | Getty Images
U.S. crude oil futures fell more than 6% on Wednesday, as China slapped retaliatory tariffs on the U.S. after President Donald Trump’s sweeping levies took effect.
The U.S. benchmark dropped $4.01, or 6.7%, to $55.57 per barrel by 7:53 a.m. ET. Global benchmark Brent tumbled $4.04, or 6.4%, to $58.78.
The oil sell-off took a leg lower after Beijing announced tariffs of 84% on U.S. goods in response to Trump’s levies. China’s tariffs take effect on April 10.
Traders are worried the world is descending into a full-blown trade war that will trigger a recession, hitting crude oil demand. OPEC+, meanwhile, has agreed to accelerate output in May, which will bring more oil to a market that was already facing a surplus.
The collision of recession fears and growing oil supply is a “toxic cocktail,” Helima Croft, global head of commodity strategy at RBC Capital Markets, told CNBC on Tuesday.
The U.S. and Iran are scheduled to hold talks in Oman on Saturday to discuss the Islamic Republic’s nuclear program. Successful negotiations could result in more Iranian oil entering the global market.