Global trade war pushed Brent crude oil futures to below US$59 per barrel in intraday trading on 9 April, while share prices of offshore oil and gas service companies continued to skid
President Trump’s escalating global tariff war has sent the price of Brent crude oil futures to their lowest levels in four years and shares of publicly traded offshore oil and gas companies tumbling.
According to ICE data, Brent crude oil futures for June 2025 dipped to as low US$58.46 in intraday trading (11:46 AM GMT) on 9 April. This was down an astounding 22% since the first wave of tariffs were issued on 2 April on what the President dubbed ‘Liberation Day.’ At the time, Brent crude was trading at US$74.95 per barrel. Brent crude is now trading at levels not seen since 2021 during the Covid pandemic.
In its latest round of tariffs issued on 9 April, President Trump slapped Chinese imports with a 104% levy, and China countered with an 84% tariff on US imports starting 10 April.
Analysts are warning that a continued tariff-fuelled trade war could send markets crashing to levels near US$40 per barrel.
Further pressure on prices could come from OPEC+ (Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman), which confirmed an accelerated crude oil output increase of 411,000 barrels per day (b/d) starting in May 2025.
Rystad Energy said this adjustment, equivalent to three monthly increments, exceeds the market’s prior expectation of a 135,000 b/d hike for May, as reflected in pre-meeting forecasts.
“This move brings forward a larger volume of supply as part of the ongoing unwinding of the 2.2M b/d voluntary cuts that began on 1 April,” said the energy analyst.
In comments to Fox Business, JPMorgan chief executive, Jamie Dimon warned the tariffs could lead to a recession.
In a note prior to the latest round of tariffs, Rystad Energy said, “China’s aggressive retaliation diminishes the chances of a quick deal between the world’s two biggest economies, triggering mounting fears of economic recession across the globe.”
Plummeting oil prices have scrambled jittery investors, pushing down shares of offshore oil and gas service companies. As shown in the accompanying table, share prices of a sampling of 10 offshore energy service companies, including drilling contractors, drilling service companies, offshore support vessel operators, and subsea service providers traded on the NYSE fell between 15% to 31% over the six-day period (2 to 8 April).
Given the current climate, it will be interesting to see the reaction to a planned offshore oil and gas lease sale for the US Gulf. The US Bureau of Ocean Energy Management plans to publish a notice of the sale in June 2025.
