Oil prices slide below $60 as trade tensions and supply hike pressure market
Crude oil falls to 2021 lows as global trade war and OPEC+ supply actions weigh on prices
West Texas Intermediate (WTI) crude oil futures tumbled more than 3% to trade below $60 per barrel on Monday, marking the lowest level since April 2021. The decline follows intensifying global trade tensions and heightened concerns over weakening energy demand.
Last week, WTI posted its largest weekly loss in two years after U.S. President Donald Trump imposed sweeping new tariffs on major trading partners, triggering retaliatory measures from countries including China.
China, the world’s largest oil importer, now faces more than 50% tariffs on its exports to the U.S., while Beijing responded with 34% tariffs on U.S. goods. In a Sunday statement, President Trump dismissed claims that he was deliberately provoking a sell-off but suggested that “sometimes you have to take medicine to fix something.” Traders took the remarks as a sign of continued policy firmness, deepening the risk-off sentiment across commodity markets.
USOIL price movement (February 2025 - April 2025) Source: TradingView.
Supply-side pressure deepens downside bias
Adding to bearish pressure, Saudi Aramco cut its crude prices for Asian buyers in May to the lowest in four months, following the OPEC+ alliance's announcement of a surprise output increase. The development reinforced concerns over a potential oversupply, just as global demand risks are mounting.
Technically, WTI recovered slightly to $59.25 during early European trade from Friday’s close of $60.48, while Brent crude rose to $62.78 from $64.08. Despite the modest bounce, oil remains under significant pressure. Immediate resistance lies at $63.34 and $65.32, while key support levels are at $58.45 and $56.57. The 50-day and 200-day exponential moving averages at $69.05 and $72.06 respectively, remain well above current prices, affirming the prevailing bearish structure.
Unless crude reclaims the $65–$66 resistance zone with conviction, analysts caution that a further slide toward the $54–$56 area is increasingly likely.
In our earlier analysis, we highlighted how softening demand from Asia and geopolitical friction—especially in relation to the Trump administration’s aggressive trade stance—were forming the backbone of downward pressure in oil markets. This remains the case as technical and fundamental factors both tilt to the downside.
