Oil prices are heading for a second consecutive weekly loss, hit by US President Donald Trump’s tariff attacks. However, prices have stabilized somewhat after Trump announced a 90-day pause in tariffs.
Brent crude was trading at $63.01 a barrel, while WTI crude reached $59.74 a barrel. Despite stable conditions, the weekly price change remains minor compared to last week’s sharp decline. Reuters reports that Brent will likely fall by 4%, while WTI may drop by about 3.8%. Both benchmarks fell by 11% in the previous week.
Warren Patterson and Ewa Manthey, analysts at ING Bank, noted in a note issued today that the pause “has provided some relief to markets,” although “there is still a lot of uncertainty surrounding trade.” They explained that this uncertainty will negatively impact global growth, raising concerns about oil demand. However, the two analysts emphasized that “the situation now is better than in the past.”
Expectations of Continued Pressure on Oil Prices Due to a Global Recession
The main factor pressuring oil prices remains fears of a global recession. Traders have yet to fully absorb the impact of the tariff suspension. Analysts at ANZ Bank estimated that if global economic growth slows to less than 3%, oil consumption will decline by 1%.
Currently, the situation remains uncertain, as both the United States and China have expressed willingness to negotiate a trade agreement, but mutual pressure continues. China’s latest retaliatory move was to restrict the import of Hollywood films, a measure analysts considered symbolic, given the decline in Hollywood film revenues in China in recent years.
U.S. Energy Information Administration Expects Decline in Oil Demand
The U.S. Energy Information Administration expects a decline in oil demand in the near future. In its April Short-Term Energy Outlook, the EIA projects that recent developments in global trade policy and oil production will reduce global demand growth for petroleum products through 2026. This contributes to significantly lower oil prices compared to previous forecasts.
In its report, the EIA noted significant uncertainty regarding energy supply, demand, and prices. The U.S. crude oil price index (STEO) was based on the current market situation, which witnessed several developments in early April. On April 2, President Trump signed an executive order imposing a 10% tariff on imports from all countries, with higher tariffs for some countries. China retaliated on April 4 with a 34% tariff on U.S. imports.
Trade Policy Impacts on Oil Prices
The imposition of tariffs by both sides led to a 12% decline in the price of spot Brent crude on April 2, reaching $68 per barrel on April 4. In addition, OPEC+ announced on April 3 that it would begin increasing production starting in May, as originally scheduled for July. These announcements have led to volatility in oil prices, and the market experienced significant volatility in the first month of April.
The U.S. Energy Information Administration (EIA) completed its report on April 7, which covered changes in the energy market, with volatility continuing due to market participants’ rapid responses to any new developments.
Global Oil Supply, Demand, and Prices
The EIA expects continued growth in U.S. and global oil production. OPEC+ will accelerate previously announced production increases. The United States will also exempt energy from recently announced tariffs. The EIA also expects global oil inventories to increase starting in mid-2025, but there are uncertainties that could lead to a decline in economic growth.
Factors Affecting Oil Prices
According to the Energy Information Administration, the average price of Brent crude oil in 2025 is expected to hover around $70 per barrel, about 10% lower than the March forecast. The agency also expects the price to decline to around $60 per barrel in 2026.
Other factors affecting oil prices include sanctions imposed on Russia, Iran, and Venezuela. These sanctions could have a negative impact on oil prices, making future forecasts more uncertain. These sanctions prevent certain countries from accessing international markets or from exporting oil.
US Gasoline Prices
The average price of regular gasoline in the United States is expected to be around $3.10 per gallon this summer, primarily due to lower crude oil prices. If forecasts materialize, this would be the lowest price since 2020 after adjusting for inflation.
US Propane Markets
Among energy products, China’s tariffs on US goods are expected to significantly impact propane markets. China has been a major importer of US propane. With Chinese propane demand declining, some shipments are likely to find new markets. However, the decline in propane demand is expected to lead to increased inventories on the Gulf Coast, putting pressure on spot propane prices at Mount Belvieu.
U.S. Natural Gas
The U.S. Energy Information Administration (EIA) projects U.S. natural gas demand to grow 4% in 2025, reaching approximately 115 billion cubic feet per day. An 18% increase in exports and stronger demand from the residential and commercial sectors primarily drive this growth. Two new LNG export facilities—Plaquemines Phase 1 and Golden Pass LNG—will further boost natural gas exports. Although China announced plans to halt LNG imports from the United States, the EIA expects that strong global demand for LNG will offset any major impact.
Natural Gas Inventories and Prices
U.S. natural gas inventories ended the drawdown season 6% lower than the five-year average. This decline was caused by cold weather in January and February, which led to the withdrawal of large quantities of natural gas. The Energy Information Administration (EIA) expects natural gas prices to rise this year, with the Henry Hub price averaging $4.30 per million British thermal units (MMBtu) in 2025, and a further increase to $4.60 in 2026.
Future oil prices are influenced by numerous economic and geopolitical factors. Price volatility indicates that markets remain uncertain, especially with developments in global trade policy. The EIA expects this price pressure to continue in the coming years, with the potential for continued volatility in oil and natural gas prices.
