Oil Prices Plummet: How Tariffs and OPEC-Plus Supply Are Impacting Markets

 

Oil prices have taken a significant hit due to tariff-related demand worries and increased OPEC+ supply. The Brent oil price has plummeted to its lowest level since August 2022, trading below $70 per barrel ¹. This decline is largely attributed to the unexpected reciprocal tariffs imposed by the US, which have raised concerns about demand.

Adding to the downward pressure, OPEC+ announced a surprise increase in oil supply for May, which will add 411,000 barrels per day to the market. This move has caught investors off guard, as the market was expecting a more modest increase.

The increased supply, combined with demand uncertainty, has led analysts to lower their oil price forecasts for the remainder of the year. ING Research has cut its 2025 average Brent forecast from $74 per barrel to $72 per barrel .

Tariff-related demand worries: The US tariffs have raised concerns about demand, leading to a decline in oil prices.

Increased OPEC+ supply: The surprise increase in oil supply for May has added to the downward pressure on oil prices.

Demand uncertainty: The ongoing trade tensions and tariff disputes have created uncertainty around demand, making it challenging for investors to predict oil price movements.

Overall, the oil market is facing significant challenges, and the plunge in oil prices is likely to continue unless there is a significant shift in demand or supply dynamics.