Crude Oil Dragged To 4-Year Lows As Trump Tariff War With China Sparks Recession Fears

Crude oil prices sank to four-year lows on Tuesday and declined further in early morning trade on Wednesday, dragged by the ongoing trade war between the U.S. and China triggered by Trump’s tariffs.

At the time of writing, U.S. West Texas Intermediate (WTI) futures were trading at $57 a barrel, down nearly 4.5%, after settling at $59.58 on Tuesday.

These are the lowest levels hit by WTI crude since January 2021.

WTI futures have tumbled more than 20% since President Trump’s ‘Liberation Day’ tariffs took effect on April 2.

The administration imposed levies on goods imported into the U.S. from 185 countries and territories.

Both the U.S. and China have engaged in constant back-and-forth on tariffs. While the Trump administration launched the first salvo and subsequently hiked tariffs on Chinese imports of goods to 104%, China hit back on Wednesday with 84% tariffs on U.S. goods.

At its current levels, WTI crude is already below the levels projected by the analysts at Goldman Sachs.

The brokerage said in a note on Monday that it expects the commodity to hit $58 a barrel by December 2025 and $51 by December 2026, according to a Reuters report.

This comes after Goldman Sachs revised the odds of a recession twice in a week, from 20% initially to 45%, following Trump’s April 2 tariff announcement.

Trump's tariffs have drawn criticism from some of his billionaire supporters and backers, including Home Depot co-founder Ken Langone and hedge fund manager Bill Ackman.

Amid recession concerns and escalating tariff wars, the SPDR S&P 500 ETF Trust (SPY), which tracks the S&P 500 index, edged up by 0.2% at the time of writing.

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