West Texas Intermediate (WTI) crude oil prices declined for the second consecutive session, hovering around $59.30 per barrel during Asian trading hours on Friday. The drop in prices comes as escalating trade tensions between the United States and China cast a shadow over global oil demand prospects.
On Thursday, the U.S. government raised tariffs on Chinese imports to a staggering 145%, adding a new 125% levy on top of an existing 20% duty. This move overshadowed U.S. President Donald Trump’s announcement of a 90-day pause on tariff hikes for most other countries, stoking fears about the impact on fuel demand from China, the world’s largest oil importer.
A prolonged U.S.-China trade conflict poses a significant threat to global trade, disrupting supply chains and hindering economic growth, all of which could depress oil consumption in both countries, the world’s top energy consumers.
In response to these developments, the U.S. Energy Information Administration (EIA) revised down its global economic growth and oil demand forecasts. The EIA now projects global oil demand will increase by only 900,000 barrels per day (bpd) this year, a reduction from the earlier estimate of 1.2 million bpd, reaching approximately 103.6 million bpd. For 2026, demand growth is now expected to be 1 million bpd, also lower than previous expectations.
The EIA also lowered its oil price forecast for this year and next, citing heightened uncertainty due to slower global growth and the possibility of rising supply. Adding pressure on prices, the OPEC+ alliance, which includes Russia, plans to increase production by 411,000 bpd in May, raising concerns about a market surplus.
Meanwhile, the Trump administration imposed new sanctions on Iranian oil networks, targeting a China-based storage facility, just days before anticipated U.S.-Iran talks. Further complicating the supply outlook, the Keystone pipeline remains closed following a spill in North Dakota, with no clear timeline for its reopening, adding additional risks to oil supply.
