Brent oil futures have fallen by around $10 per barrel since Thursday, pressured by the introduction of new tariffs and an unexpected increase in supply from OPEC+.
The tariffs have raised concerns about weaker global demand, while the surprise output boost has added to fears of oversupply, putting downward pressure on prices.
Oil prices plunged sharply as a fresh wave of tariffs sparked fears of a global economic slowdown, dampening expectations for oil demand.
Brent crude experienced its steepest sell-off since August last year, shedding over 10% in under two days and marking its worst single-day drop since 2022.
While OPEC is likely mindful of the risks tied to demand destruction, its decision to boost production is expected to have limited short-term impact on prices.
Market signals suggest that OPEC+ is either aiming to penalize members who exceeded production quotas or preparing for potential supply disruptions due to short-term sanctions impacts on countries like Iran and Venezuela.
Tariffs imposed by U.S. President Donald Trump are also weighing on oil prices.
With demand remaining weak, crude prices are unlikely to recover in the near term—posing a significant risk to the global economy.
Beyond tariff concerns, OPEC’s abrupt shift in its May agreement and the unexpected increase in supply was unprecedented, adding further pressure to an already fragile oil market.
OPEC+ is now set to raise supply by 411,000 barrels per day, citing strong fundamentals and a “positive market outlook.”
However, ongoing tariff uncertainty continues to cast a shadow over demand prospects and price stability.
Meanwhile, Nigeria’s oil industry is under pressure, with weak demand for its exports reflected in the sluggish and unappealing loading of crude cargoes.
Argus data reveals that traders are still searching for buyers for Nigerian crude cargoes, with a large portion of the April export schedule still open.
The weak sales are attributed to competition from cheaper alternatives, such as U.S. WTI, Kazakhstan’s light sour CPC Blend, and Mediterranean sweet crudes, particularly as Europe enters its refinery maintenance season.
