Crude Oil Prices Plunge on Escalating Trade Tensions, Recession Fears

05:01 AM EDT, 04/07/2025 (MT Newswires) -- Crude oil prices plummeted early on Monday amid escalating trade tensions between the U.S. and China, resulting in markets fearing a recession.

Brent crude dropped 3.4% to US$63.35/barrel and West Texas Intermediate crude sank 3.7% to US$59.67/b at last look. Both benchmarks dropped to their lowest level since April 2021, Reuters said in a Monday report.

This comes after China announced retaliatory tariffs on U.S. goods, resulting in investors pricing in a higher probability of recession and confirming fears that a full-blown global trade war is underway, the report said.

"It's hard to see a floor for crude unless the panic in the markets subsides and it's hard to see that happening unless Trump says something to arrest snowballing fears over a global trade war and recession," Reuters quoted Vandana Hari, founder of oil market analysis provider Vanda Insights, as saying.

Though oil, gas and refined product imports are exempted from U.S. President Donald Trump's tariffs, the policies are still expected to stoke inflation and slow economic growth, which will weigh on oil prices, according to the report.

U.S. Federal Reserve Chair Jerome Powell said Trump's new tariffs are "larger than expected," and the economic fallout likely will be as well, Reuters reported.

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