Crude oil prices fall to a year-low as US-China trade war intensifies

Crude oil prices fell to their lowest level since 31 December 2024 amid the escalating US-China trade war. Investors are increasingly concerned about a slowdown in global economic growth and weakening energy demand in China, the world’s largest oil importer.

On Tuesday, China's State Council Tariff Commission announced that it would impose a 15% levy on coal and liquefied natural gas (LNG) from the US, as well as a 10% duty on American crude oil, farm equipment, and certain vehicles, effective from 10 February. Additionally, data from the US Energy Information Administration (EIA) revealed that US crude oil inventories had risen far beyond market expectations, further indicating weakened demand.

On Wednesday, West Texas Intermediate (WTI) crude futures slumped 2.3% to $71 per barrel, while Brent crude futures dropped 2.09% to $74.61 per barrel. Both oil benchmarks saw a slight rebound in Thursday's Asian session but remained at their lowest levels this year.

Crude oil prices have been in retreat as US inventory data showed stockpiles had climbed for a second consecutive week. Crude inventories rose by 8.66 million barrels in the week ending 31 January, significantly surpassing the estimated increase of one million barrels. This followed a build of 3.5 million barrels in the previous week, suggesting weakening demand. Previously, US crude inventories had declined for nine consecutive weeks between late November and early January, pushing oil prices to five-month highs, peaking in mid-January.

Political factors have also weighed on crude markets. Last month, US President Donald Trump urged Saudi Arabia and OPEC to lower oil prices while reaffirming plans to increase US oil supply. This week, Trump imposed 10% tariffs on