The price of oil in the global market plunged further Friday morning to the lowest levels since 2021. 

Just after 11 a.m. EST, both international and domestic benchmark oil prices had dropped by around 8%, inching closer to $60 a barrel. Brent Crude had fallen by 7.93% to $64.58 per barrel, and West Texas Intermediate had also dropped by 8.71% to $61.11. 

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The plunging prices come on the heels of the Trump administration’s sweeping tariffs announced Wednesday, which included a baseline 10% tariff on all exports to the United States, with minimal exceptions, and higher tariffs on nations with large trade surpluses with the U.S.

China announced retaliatory tariffs on the U.S. Friday morning, saying it would impose additional tariffs of 34% on all U.S. goods starting April 10. 

Analysts have indicated that the escalating conflict between the U.S. and foreign nations over tariffs is further propelling the market to a global trade war, which will curb economic growth and demand for energy, putting downward pressure on prices.

While energy and energy products were largely spared from the Trump administration’s tariffs, some experts have indicated the industry will still feel the effects of the levies. 

“It’s unquestionably a good thing that some of the energy market has been protected from the impact of these tariffs. But I think what it failed to account for is all the equipment and products that are necessary for the transportation and distribution of energy,” Josh Zive, a senior principal with Bracewell, told the Washington Examiner.

“Whether you’re talking the steel that goes into the pipes or compressors that are used to move product, it often depends on international inputs, and so as a result, those inputs are still facing significant price uncertainties as a result of these tariffs,” Zive continued.

He warned that despite an initial plunge in fuel costs, the industry is bracing for energy prices to increase. Traders are expected to remain hesitant about making further short-term investments in the changing market.  

Friday’s dramatic dip in prices was also fueled by OPEC+’s decision to speed up its planned increase in oil output by hiking production more than expected next month. Yesterday, Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman decided to increase oil production by 411,000 barrels a day starting in May. 

The oil-producing bloc had been expected to increase output by only 137,000 barrels per day, after having started to gradually ease production cuts of around 2.2 million barrels a day in April. 

For months, market analysts have warned that these production hikes, along with any increases in domestic oil production spurred by the Trump administration, could drop prices to as low as $50 a barrel. 

OIL PLUMMETS AS OPEC ANNOUNCES HIGHER OUTPUT HIKES THAN EXPECTED

Some have predicted that the end of the week price slump won’t last long, particularly due to the timing of OPEC+’s decision. 

“With potential supply disruptions stemming from sanctions and tariffs—on both sellers and buyers—oil prices are unlikely to stay below $70 for long,” Mukesh Sahdev, global head of commodity markets for Rystad Energy, told the Wall Street Journal.