Oil prices continued their decline on Tuesday, falling to fresh four-year lows as escalating trade tensions between the U.S. and China deepened recession fears, overshadowing a rebound in equity markets. Brent crude settled at $62.82 a barrel, down $1.39 or 2.16%, while U.S. West Texas Intermediate (WTI) fell $1.12, or 1.85%, to close at $59.58. Both benchmarks had plunged by 14–15% on Monday, following President Trump’s announcement of sweeping “reciprocal tariffs” on all U.S. imports.
The sell-off intensified after a White House official confirmed that a 104% tariff on Chinese goods would take effect Wednesday morning, following Beijing’s refusal to lift its retaliatory 34% tariff. China responded defiantly, with its Commerce Ministry declaring it would “fight to the end,” stoking fears of a full-scale global economic contraction. Brent fell more than $2 during Tuesday’s session before settling.
Analysts warned of waning energy demand as trade hostilities mount. StoneX strategist Alex Hodes noted that recession concerns are now a central factor weighing on oil prices. Goldman Sachs forecast Brent and WTI prices at $62 and $58 per barrel, respectively, by December 2025, and projected further declines a year later. Meanwhile, J.P. Morgan’s Natasha Kaneva said the U.S. appears committed to pushing oil prices toward $50, even if that requires enduring shale-like disruption reminiscent of the 2014 OPEC price war.
Separately, geopolitical tensions resurfaced as Trump announced upcoming direct talks with Iran on its nuclear program—though Iran later clarified the discussions would be indirect. U.S. Energy Secretary Chris Wright said further sanctions were likely if Iran failed to cooperate. On the supply side, early estimates indicated a 1.6 million barrel rise in U.S. crude and distillate inventories last week, reinforcing concerns about weakening demand ahead of official data due later in the week.