Oil prices plunged to four-year lows on Wednesday, with Brent crude falling $4.02, or 6.40 per cent, to $58.80 a barrel and US West Texas Intermediate (WTI) dropping $4.03, or 6.76 per cent, to $55.55, after China announced steep new tariffs on US imports in retaliation against Washington's latest trade measures. Starting Thursday, Beijing will impose tariffs of up to 84 per cent on US goods, more than doubling the previous rate. The move came after President Donald Trump's 104 per cent tariffs took effect earlier in the day, escalating tensions and fuelling fears of a prolonged trade war between the world's two largest economies. Analysts warned that the standoff could curb global fuel demand. Rystad Energy said China's oil demand growth—estimated at 50,000 to 100,000 barrels per day—faces significant downside risk if the conflict persists. Additional pressure came from OPEC+'s decision to raise output by 411,000 barrels per day in May, a shift expected to tip the market into surplus. Meanwhile, Russia's ESPO Blend slipped below the $60 Western price cap for the first time this week. Goldman Sachs revised its outlook, forecasting Brent to decline to $62 a barrel by December 2025 and to $55 by end-2026, with WTI seen following a similar path. In a rare bullish sign, US crude inventories dropped by 1.1 million barrels last week, according to the American Petroleum Institute. Official data from the Energy Information Administration is due later on Wednesday. Attribution: Reuters Subediting: M. S. Salama
