Oil prices tumble to four-year low as US-China trade war fuels recession fears

Crude oil prices fell for a fourth consecutive trading day on Tuesday, hitting their lowest levels in four years, as recession fears intensified amid a deepening global trade war. US President Donald Trump’s sweeping reciprocal tariffs have now come into effect, with China—currently the world’s largest oil importer—facing 104% import duties.

Since Trump’s announcement of the new tariffs, Brent crude futures have dropped more than 19% to $60.41 per barrel, while West Texas Intermediate (WTI) futures plunged 20% to $57.06 per barrel—both marking their lowest levels since March 2021.

On Tuesday, China vowed to “fight to the end” following Trump’s threat of an additional 50% in tariffs. The US, meanwhile, remains committed to enforcing the full 104% levies. The intensifying trade war between the world’s two largest economies has once again triggered a broad sell-off in risk assets.

“For China, the tariffs could significantly drag down exports and industrial output—two key engines of growth—while the tech and EV sectors may be particularly hard hit. We’re likely to see softer oil demand as a result,” Dilin Wu, a market analyst at Pepperstone Australia, said in an email. “The 104% tariff could push US inflation back toward 4%, even before other new tariffs are factored in. That would raise the odds of a deeper recession in the US as well,” she added.

Compounding the downside pressure, eight key members of the Organisation of the Petroleum Exporting Countries (OPEC) agreed last week to accelerate the unwinding of earlier production cuts. Meanwhile, Trump’s so-called “secondary tariffs” on major oil exporters such as Venezuela, Iran, and Russia may offset some of the production hikes. However, recession fears heavily overshadow