Oil prices plunged on Thursday, marking the steepest decline since 2023, as markets reacted to a combination of increased OPEC+ production and new US tariffs that heightened concerns over global economic growth.
West Texas Intermediate (WTI) crude futures dropped as much as 7.3%, while Brent crude, the international benchmark, fell over 5% to approximately $70 per barrel.
The sharp decline followed an unexpected announcement from OPEC+—a coalition of oil-producing nations including Saudi Arabia and Russia—to accelerate their planned production increases. The group decided to raise output by 411,000 barrels per day (bpd) starting in May, a figure three times higher than initially scheduled.
“The combination of OPEC+ supply increases and weaker macro sentiment is leading to increased downside risk for crude oil prices,” UBS analysts said in a note to clients. “We now see WTI trading toward the lower end of the $55–$75 per barrel range.”
Adding to market anxieties, President Trump’s sweeping new tariffs could have a significant impact on global oil demand, analysts commented.
“Our economists estimate that the negative impact of US tariffs on global GDP growth could be at least 50 basis points, potentially double that,” UBS said. “This could translate to a 250,000–500,000 bpd hit to oil demand growth, which is nearly half of our 2025 forecast of 1.1 million bpd at the upper end.”
With crude prices under pressure, UBS expects oil producers with strong balance sheets to be more resilient
Meanwhile, the natural gas sector could see relative strength amid oil’s downturn. “While weaker demand is a risk, it could be offset by lower associated supply,” UBS noted.
Energy stocks reflected the market’s uncertainty, with shares of Exxon Mobil Corp (NYSE:XOM, ETR:XONA) and Chevron Corporation (NYSE:CVX, ETR:CHV) declining, contributing to a more than 6% drop in the S&P 500 Energy sector index.