Oil prices dropped to multi-month lows on Tuesday as OPEC+ confirmed its first production increase since 2022, while U.S. tariffs on Canada, Mexico, and China—along with Beijing’s retaliatory measures—added pressure. Brent crude settled at $71.04, down $0.58 or 0.8%, after hitting a session low of $69.75, its weakest since September. WTI crude fell to $68.26, losing $0.11 or 0.2%.
The decline followed OPEC+’s decision to proceed with an April output increase of 138,000 barrels per day, a move analysts suggest reflects political considerations, including pressure from U.S. President Donald Trump for lower oil prices. The market also reacted to U.S. tariffs taking effect at 25% on imports from Canada and Mexico, including a 10% levy on Canadian energy, while tariffs on Chinese goods doubled from 10% to 20%. In response, China raised import duties on U.S. agricultural products and restricted 25 American firms from trade and investment.
Geopolitical developments added further uncertainty. Ukrainian President Volodymyr Zelenskiy signaled willingness to negotiate after last week’s Oval Office confrontation with Trump, while the White House reportedly asked for a sanctions relief list to discuss with Russia, potentially boosting Moscow’s oil exports. However, Goldman Sachs analysts noted that Russia’s supply remains more constrained by OPEC+ quotas than by sanctions. Meanwhile, concerns over weaker Chinese demand, driven by upcoming refinery maintenance, further weighed on the market.
In a separate development, the U.S. revoked Chevron’s license to operate in Venezuela, cutting off a significant crude supply channel after Washington accused President Nicolás Maduro of failing to meet electoral reform commitments. While oil prices initially plunged on these developments, they stabilized later in the session, though lingering concerns over supply growth, trade disruptions, and slowing demand continue to pressure the market.