JAKARTA – Global oil prices plummeted after Donald J. Trump, the President of the United States, announced an aggressive new tariff policy on Wednesday (2/4).

The move raised concerns about an escalation of the global trade war, which could significantly reduce crude oil demand.

Brent crude oil futures for June 2025 delivery fell sharply by US$1.97 or 2.63%, to US$72.98 per barrel during trading on Thursday (3/4) at 08:15 WIB.

Meanwhile, West Texas Intermediate (WTI) crude oil futures for May 2025 delivery also dropped by US$1.98 or 2.76%, to US$69.73 per barrel.

The tariff policy had been heavily publicized by Trump, who referred to April 2 as "Liberation Day," claiming it would shake the global trading system. Trump announced a base tariff of 10% on all imports to the US, with higher duties imposed on numerous major trading partners.

However, imports of oil, gas, and refined products were excluded from the new tariffs, as confirmed by the White House.

This created bearish pressure in the oil market. Negative sentiment intensified after the US Energy Information Administration (EIA) reported an unexpected increase in US crude oil inventories by 6.2 million barrels last week, contrary to analysts' forecasts of a 2.1 million barrel decrease.

Furthermore, Trump's threat to impose secondary tariffs on Russian oil—Russia being the world's second-largest oil exporter—added to market uncertainties. Russia responded firmly by restricting key export routes for oil from the Black Sea port of Novorossiysk, a day after scaling back shipments through the Caspian pipeline network.

These developments highlight the vulnerability of global oil prices to the dynamics of international trade policies. Market participants are now closely monitoring further measures from the White House, which could have a greater impact on global crude oil trade. Source: Reuters (EF/LM)