NextFin news, On Friday, October 11, 2025, global crude oil markets experienced a sharp decline as West Texas Intermediate (WTI) crude prices crashed to $58.90 per barrel, down 4.24%, while Brent crude fell 3.82% to $62.73 per barrel. This marked the lowest closing prices since May 2025.
The plunge was driven by two major developments: U.S. President Donald Trump's announcement of 100% tariffs on Chinese imports and the announcement of a ceasefire between Israel and Gaza. The ceasefire eased geopolitical tensions in the Middle East, eroding the risk premium previously factored into oil prices. Concurrently, the tariff escalation reignited fears of a full-scale U.S.-China trade war, dampening near-term oil demand expectations.
The combination of a geopolitical risk unwind and a macroeconomic demand downgrade led traders to rapidly reduce exposure to risk assets, pushing oil prices below the psychologically critical $60 threshold. WTI crude notably dropped from $61.50 to $58.70 in under four hours, highlighting the sensitivity of energy markets to U.S.-China relations.
China responded to the U.S. tariffs by imposing new port fees of ¥400 per tonne (approximately $56 per metric ton) on U.S.-built vessels and expanding export curbs on rare earth elements to five additional materials. These retaliatory measures are expected to reduce global trade flows by an estimated 0.7% in the fourth quarter of 2025, threatening the recovery of oil demand in industrial economies.
Meanwhile, oil supply continues to outpace demand. OPEC+ production increased by 2.3 million barrels per day over the past year, while non-OPEC supply from countries including the U.S. and Brazil has also grown. This supply glut, combined with weakening demand prospects, has contributed to the downward pressure on prices.
The $200 billion selloff in energy markets reflects investor concerns over the dual shocks of geopolitical easing and escalating trade tensions. Market participants remain cautious as the interplay between global trade policies and geopolitical developments continues to influence oil price volatility.
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