Oil prices fell sharply following tariffs announced by US President Donald Trump, intensifying concerns over global oil demand and offering a potential advantage to energy-importing economies such as Türkiye.
On April 2, Washington unveiled plans to impose at least 10% additional tariffs on goods from numerous trading partners, fueling fears of a deepening global trade war. The announcement exerted significant downward pressure on oil markets. Brent crude dropped 9.1% to $65.74 per barrel during the week, marking its lowest weekly close since August 2021. Meanwhile, West Texas Intermediate (WTI) crude slid 9.8% to $62.10.
Following retaliatory measures from China, Brent crude plunged to $58.22 on April 9, hitting its lowest level since February 2021. However, prices rebounded by 6.7% to $65.47 later that day after the US administration announced a 90-day suspension of the additional tariffs for some countries. Despite the rebound, Brent ended the week at $64.26, down 2.2%.
For the first time in nearly 4 years, Brent crude closed below the $65 mark. WTI crude also declined, finishing the week 1.8% lower at $60.97 per barrel.
The following week, Brent climbed 4.2% to $66.96, supported by supply concerns after Trump reiterated that sanctions on Iran would be fully enforced. However, prices retreated again in the week starting April 21, falling 1.6% to $65.87, amid reports of progress in negotiations with Tehran and renewed worries that a prolonged US-China trade dispute would weigh on global demand. WTI crude slipped 1.2% to $62.93 over the same period.
Since April 2 — dubbed ‘liberation day’ by Trump — Brent crude has shed 10.5%, or approximately $7.80 per barrel, while WTI crude has lost 10.7%, or about $7.60.
– Falling oil prices to lower Türkiye’s energy costs
The recent price declines present significant opportunities for net energy-importing countries like Türkiye, Fereydoun Barkeshli, President of the Vienna Energy Research Group, told Anadolu.
Barkeshli noted that the drop in oil prices would help ease Türkiye’s energy bill but warned that a potential global economic slowdown triggered by Trump’s tariffs could weigh on the country’s growth prospects. He described Trump’s trade war with China as a harbinger of a new global economic order, adding that Türkiye is ‘on the safe side for now.’
‘I believe that, over time, economies will become more regionalized than before. I think countries in the Eurasian landscape will have many more opportunities to cooperate than in the past,’ Barkeshli said.
‘This might include free trade zones, a gradual distancing from the US dollar, and the establishment of joint banking and currency exchange mechanisms,’ he added.
– Global dollar weakening reduces costs
Homayoun Falakshahi, a senior oil analyst at Kpler, attributed the decline in oil prices to slowing global growth expectations. He revealed that Kpler revised its US growth forecast down from 2% to 0.8%, prompting a cut in its 12-month average price forecast for Brent crude from $71 to $66 per barrel.
Falakshahi said Türkiye has been importing an average of 58,000 barrels of crude oil per day since the start of the year, and noted that the decline in oil prices is helping to lower total energy costs for countries like Türkiye.
Additionally, the global weakening of the dollar has further reduced costs, Falakshahi said, though he noted that the depreciation of the Turkish lira against the dollar has largely offset the currency advantage.
Highlighting trade dynamics, Falakshahi pointed out that the trade deficit between the US and Türkiye widened by 62.7% in 2024 compared to the previous year, reaching approximately $1.5 billion. He said Trump’s 90-day tariff delay could offer an opportunity to renegotiate trade terms between the two countries.
– Pressure on shale oil increases
Falakshahi also observed that while global economic growth has lost momentum due to Trump’s tariffs, demand for petroleum products continues to weaken.
He noted that the growth forecast for petroleum product demand has been revised down from 750,000 barrels per day (bpd) to 500,000 bpd, driven largely by reduced diesel and naphtha consumption, particularly in the US and China.
Falakshahi warned that if oil prices remain at current levels, shale oil production in the US could come under pressure.
‘Shale oil production could be impacted if prices remain at this level, as the breakeven price for new wells in US shale is estimated at $65 per barrel WTI. Production is unlikely to decrease in the short term, but if prices stay around $60 per barrel over the coming months, we believe US production could fall by 300,000 bpd by year-end,’ he said.
‘If prices drop to $55 per barrel, production could decline by 600,000 bpd. In the short term, it is more costly to halt drilling operations as equipment and staff are already contracted; therefore, future drilling activity will be impacted, affecting production roughly five to six months down the line,’ he concluded.
