Oil prices continued their downward spiral on Monday as US President Donald Trump signaled his commitment to imposing sweeping global tariffs, despite growing fears of a recession and plunging stock markets. According to the Financial Times, Brent crude fell by 3.48% to $63.30 per barrel by 10:56am BST, marking a 15% decline over the past five days. This sharp drop reflects intensifying concerns that the global economy is heading for a significant slowdown.
The decline in oil prices follows Trump’s “liberation day” announcement of new tariffs last Wednesday, which came just hours after OPEC+ made an unexpected decision to boost output. The timing of these events has raised questions about the future trajectory of the global economy, with analysts forecasting a potential recession.
“I think this is very serious. I don’t think we are in a 2008 world yet, but definitely [expecting] a significant deceleration in the global economy this year,” said Jorge Leon, head of geopolitical analysis at Rystad Energy.
In response to the mounting uncertainty, Goldman Sachs revised its oil price forecast downwards. In a note on Sunday, the investment bank predicted that Brent crude would average $58 a barrel in 2026, with West Texas Intermediate at $55. Goldman analysts also noted the growing recession risk in the US, particularly if the Trump administration goes ahead with implementing the full set of tariffs on April 9. “The risks to our reduced oil price forecast remain to the downside,” they stated, citing both the increased likelihood of a recession and potential OPEC+ supply boosts.
Morgan Stanley also adjusted its forecast, highlighting the significant drop in oil prices over the past few days. The firm pointed out that the 12.5% decline in Brent crude between Wednesday and Friday of last week has only occurred 24 times before—22 of which were tied to recessions. As a result, Morgan Stanley lowered its oil demand forecast for the second half of 2025 by 550,000 barrels a day, revising its projection for Brent crude from the “high $60s” to the “low $60s.”
Meanwhile, OPEC+ members, led by Saudi Arabia, are bringing forward plans to reverse their production cuts, increasing output by 411,000 barrels per day in May, up from a previous target of just 122,000. This decision follows tensions within the group, particularly with Kazakhstan, which has consistently pumped oil above its allotted quota.
The sharp decline in oil prices also weighed heavily on the shares of major UK-listed oil companies. Shell saw a 7% drop in its stock price, while BP fell 6%, underperforming the broader market.
As oil prices tumble and the economic outlook grows increasingly uncertain, the global market braces for the potential fallout from the continuing trade tensions and looming recession risks. All eyes remain on the White House and whether Trump will follow through with his tariff plans, which could have far-reaching implications for the global economy.
