Oil prices plunged by 8% on Friday, heading for their lowest close since the midst of the coronavirus pandemic in 2021, after China hit back with tariffs in response to U.S. President Donald Trump’s own barrage of levies this week.

China announced it will impose additional tariffs of 34% on all U.S. goods from April 10. Nations around the world have readied retaliation after Trump raised tariff barriers to their highest in more than a century, leading to a plunge in world financial markets.

Brent futures dived by $5.72, or 8.2%, to $64.62 a barrel by 1231 GMT. U.S. West Texas Intermediate crude futures lost $5.90, or 8.8%, to $61.05.

Both benchmarks were on course for their biggest weekly losses in percentage terms in more than two years.

“China’s aggressive countermove to U.S. tariffs all but confirms we are heading towards a global trade war; a war that has no winners and which will hurt economic growth and demand for key commodities such as crude oil and refined products,” said Ole Hansen, head of commodity strategy at Saxo Bank.

Output concerns fuel oil sell-off

Fuelling the oil sell-off was a decision by the Organization of the Petroleum Exporting Countries and its allies, known collectively as OPEC, to advance plans for output increases, with the group now aiming to return 411,000 barrels per day (bpd) to the market in May, up from the previously planned 135,000 bpd.

“The timing is frankly amazing,” Evans said.

Imports of oil, gas and refined products were given exemptions from Trump’s sweeping new tariffs, but the policies could stoke inflation, slow economic growth and intensify trade disputes, weighing on oil prices.

Goldman cuts oil price target

Goldman Sachs analysts responded with sharp cuts to their December 2025 targets for Brent and WTI by $5 each to $66 and $62 respectively.

“The risks to our reduced oil price forecast are to the downside, especially for 2026, given growing risks of recession and to a lesser extent of higher OPEC supply,” the bank’s head of oil research, Daan Struyven, said in a note.

However, analysts at Rystad Energy said oil prices could bounce back in the coming months.

“With potential supply disruptions stemming from sanctions and tariffs – on both sellers and buyers – oil prices are unlikely to stay below $70 for long,” said Mukesh Sahdev, Rystad’s global head of commodity markets.