Crude oil prices hit four-year low as US-China trade war escalates

Brent futures settled down $1.39, or 2.16%, at $62.82 a barrel. U.S. West Texas Intermediate crude futures settled down $1.12, or 1.85%, at $59.58.

The US has imposed a 104% tariff on China from Wednesday, a White House official said, adding 50% more to tariffs after Beijing failed to lift its retaliatory tariffs on US goods by a noon deadline on Tuesday set by Trump.

Beijing vowed not to bow to what it called US blackmail after Trump threatened the additional 50% tariff on Chinese goods if the country did not lift its 34% retaliatory tariff, said a Reuters report.

China's Commerce Ministry said the country would fight to the end, ratcheting up fears about a contraction of the global economy.

Both oil benchmarks continued to fall in post-settlement trade. US crude futures dipped to $57.88, while US stock indexes also broadly sank, the report added.

Oil price forecasts

After cutting oil forecasts twice this week, investment banking major Goldman Sachs said that Brent, in an "extreme scenario", can fall below $40 per barrel.

"In a more extreme and less likely scenario with both a global GDP slowdown and a full unwind of OPEC+ cuts, which would discipline non-OPEC supply, we estimate that Brent would fall just under $40 a barrel in late 2026," Goldman Sachs analysts said.

This assessment does not represent the financial services provider's current base case outlook of $55 per barrel for Brent next December.

"Oil prices would likely exceed our forecast if the Administration were to reverse tariffs sharply and deliver a reassuring message to markets, consumers, and businesses," Goldman Sachs said.