Oil prices have been taking a significant hit as investors react to the growing risks of a global recession fueled by U.S. President Donald Trump’s tariffs. On Wednesday, Brent crude oil futures plunged more than 4%, dropping below the $60 per barrel mark for the first time since February 2021, down from around $75 at the beginning of the month. West Texas Intermediate (WTI), the North American benchmark, also saw a 4% decline, falling to $57 per barrel.
This downturn in oil prices is part of the broader market turmoil that Trump’s trade policies are contributing to. While the president has promised cheaper energy and gasoline for U.S. consumers, it’s unclear if this is the intended route to achieve his goal. Lower oil prices could indeed result in cheaper gasoline, but the risk of triggering a global recession—if the tariffs and trade tensions continue—could have far-reaching negative impacts on the global economy, potentially outweighing any short-term benefits from cheaper energy.
Additionally, Trump’s focus on ramping up U.S. oil production adds another layer of complexity. His ambition to boost production beyond the record levels achieved during Joe Biden’s administration seems at odds with the current trend of falling oil prices. Lower prices can create challenges for oil producers, especially smaller ones that rely on higher prices to maintain profitability. Thus, the dynamics of both global recession risks and U.S. energy policies may not align as neatly as Trump might have hoped.