Oil markets are under significant pressure as prices continue to slide, with April 2025 shaping up to be the worst month for crude since late 2021. The ongoing global trade war, particularly the escalating tariff dispute between the United States and China, has sharply eroded the outlook for fuel demand, while the prospect of rising supply from major producers is adding further downward momentum.
Crude oil prices have fallen dramatically since the start of April. West Texas Intermediate (WTI) futures dropped toward $59 per barrel on Wednesday, marking a third consecutive session of losses and pushing prices back to levels last seen in April 2021. Brent crude also slipped, trading at $62.39 per barrel. Both benchmarks are on track for a monthly loss exceeding 16 percent, the steepest decline since November 2021.
The primary driver behind this selloff is the intensifying trade conflict between the United States and China. The retaliatory trade measures by both countries have heightened fears of a global economic slowdown, particularly as the U.S. and China are the world’s two largest oil consumers.
The uncertainty surrounding trade policy has already begun to impact broader economic indicators. U.S. consumer confidence has dropped sharply, signaling increased economic strain and further dampening market sentiment for oil demand.
Compounding the demand-side concerns are developments on the supply side. OPEC+ members announced in early April that some countries will accelerate planned production increases, moving them forward to May instead of July. This decision, made in the face of already weakening demand, is expected to lead to a build-up in global oil inventories.
Recent data supports this outlook. The American Petroleum Institute (API) reported that U.S. crude inventories rose by 3.76 million barrels last week, significantly exceeding the expected build of just 390,000 barrels. Analysts now anticipate that global oil inventories will continue to rise through the second quarter and into the second half of the year, putting further downward pressure on prices.
In response to these developments, major forecasting agencies have revised their outlooks. The U.S. Energy Information Administration (EIA) now expects Brent crude to average $68 per barrel in 2025, down $6 from its previous forecast, and to fall further to $61 per barrel in 2026. Trading Economics projects that crude oil will trade at around $64.15 per barrel by the end of this quarter, with a modest recovery to $67.68 over the next 12 months.
April’s price drop has been swift and severe. Since the beginning of 2025, crude oil has lost nearly $12.20 per barrel, or roughly 17 percent of its value. This sharp decline reflects both immediate concerns about trade policy and longer-term anxieties over supply and demand imbalances.
Looking forward, volatility is expected to remain high as market participants continue to digest the impact of shifting trade policies and production strategies. With OPEC+ potentially increasing output and global economic growth facing headwinds from protectionist measures, the oil market is positioned for continued turbulence.
Investors and industry participants are bracing for further price swings, with the consensus that oil prices will remain under pressure unless there is a significant resolution to the trade dispute or a change in production policy from major exporters.
April 2025 has underscored how sensitive the oil market remains to both geopolitical and supply-side shocks. With no clear end in sight to the trade war and OPEC+ poised to add barrels to the market, the outlook for oil prices remains uncertain and fraught with risk.
