Oil prices continued their downward slide for a second consecutive day as fears over economic growth, trade policies, and geopolitical tensions rattled global markets. Brent crude dropped to nearly $69 a barrel, following a 1.5% decline on Monday, while West Texas Intermediate (WTI) fell below $66.
The slump in oil prices mirrored a broader retreat from risk assets. Investors pulled back amid growing concerns that the U.S. economy could slow due to escalating tariffs and spending cuts under President Donald Trump’s administration. The uncertainty sent shockwaves through equity markets, with major stock indexes plunging as investors sought safer havens.
Oil has tumbled nearly 20% from its peak in mid-January as Trump’s aggressive trade policies and budget reduction plans darken economic forecasts. The U.S., the world’s largest producer and consumer of crude, faces growing uncertainty as businesses and financial markets grapple with policy shifts.
“The market is pricing in fears of slower economic growth, and that’s weighing on oil,” said Ed Morse, global head of commodities research at Citigroup. “When risk-off sentiment takes over, everything tied to economic expansion—oil, equities, and industrial metals—gets hit.”
Adding to the bearish sentiment, OPEC+ signaled plans to increase supply, further pressuring oil prices. The group, led by Saudi Arabia and Russia, has been gradually easing production cuts put in place during the pandemic. Meanwhile, China, the world’s second-largest oil consumer, has instructed refiners to shift away from diesel and gasoline production, raising concerns about weaker demand.
Monday’s sell-off also saw the U.S. dollar break a five-day losing streak. A stronger dollar makes oil, which is priced in the currency, more expensive for global buyers, adding another layer of pressure to crude prices.
“The strength of the dollar is playing a role here,” said Francisco Blanch, head of commodities research at Bank of America. “When the greenback gains, oil prices tend to struggle because it reduces purchasing power in emerging markets.”
Currency fluctuations have long been a key driver of commodity markets, and this latest move in the dollar underscores broader macroeconomic concerns.
Amid the market turmoil, U.S. Energy Secretary Chris Wright reaffirmed the Trump administration’s commitment to enforcing sanctions on Iranian oil exports. Speaking at the CERAWeek by S&P Global conference in Houston, Wright emphasized that Washington remains determined to curb Tehran’s ability to sell crude on global markets.
“The administration is fully prepared to enforce sanctions on Iran’s oil industry,” Wright said. “We won’t allow loopholes or backchannels to undermine our policy.”
The tough stance on Iran could limit global oil supplies, but for now, traders appear more focused on demand-side risks.
Despite concerns over trade and economic uncertainty, top oil executives voiced strong support for President Trump’s energy policies at CERAWeek. Leaders from Chevron Corp., Shell Plc, and Saudi Aramco praised the administration’s commitment to energy dominance, which has led to record-high U.S. oil production.
Vitol Group CEO Russell Hardy projected that oil prices would remain in a “reasonable” range of $60 to $80 per barrel over the coming years, despite short-term volatility.
“While we see near-term weakness, fundamentals remain strong,” Hardy said. “U.S. production continues to grow, and demand should recover as global economic concerns stabilize.”As markets digest the latest developments, analysts warn that volatility is likely to persist. The combination of trade tensions, geopolitical uncertainty, and shifting supply-demand dynamics could keep oil prices on a rollercoaster in the months ahead.
“The next few weeks will be critical,” said Helima Croft, head of global commodity strategy at RBC Capital Markets. “We’re watching whether the White House follows through on tariff threats, how China responds, and what OPEC+ decides on production levels.”
With global markets on edge, oil traders are bracing for more turbulence. The coming days will reveal whether the recent slump is a temporary correction or the start of a prolonged downturn.
