Oil Prices Hit Four-Year Low Amid Escalating US-China Trade War; Commodities Slide

Oil prices plummeted to a four-year low on Wednesday, marking the worst five-day losing streak in three years, as the intensifying trade war between the United States and China rattled global markets and sparked fears of a global recession. A broad sell-off in commodities followed suit, with base metals and agricultural products also taking a hit.

Brent crude and West Texas Intermediate (WTI) have each shed around 20% of their value since April 2, when U.S. President Donald Trump announced sweeping new tariffs on major trading partners, including a staggering 104% levy on Chinese imports. The latest wave of tariffs is expected to take effect shortly after midnight, deepening market anxieties and threatening to dent global fuel demand.

“Crude oil extended losses amid signs of escalation in the trade war,” ANZ Bank said in a research note. “The deepening standoff between the world’s two largest economies has created significant headwinds for global growth.”

Adding to the bearish sentiment, China’s retaliatory move last Friday introduced an additional 34% tariff on all U.S. goods, effective April 10. The tit-for-tat measures have triggered mounting fears that the ongoing dispute will stifle international trade and disrupt supply chains.

Ye Lin, Vice President of Oil Commodity Markets at Rystad Energy, warned that China’s projected oil demand growth of up to 100,000 barrels per day could be at risk if the trade war continues unabated. “A stronger domestic stimulus could help offset some losses, but the uncertainty is weighing heavily on energy markets,” she said.

Beyond oil, the commodities market saw widespread losses. Copper prices on the Shanghai Futures Exchange dropped to an eight-month low, while benchmark copper on the London Metal Exchange fell for a fifth straight session — its longest losing streak since March 2020. Copper has now lost nearly 10% since Trump’s tariff announcement.

Iron ore futures on the Dalian Commodity Exchange fell by 3%, while Malaysian palm oil prices slipped more than 1%. Rubber prices also slumped to their lowest in over a year.

Gold prices edged lower as U.S. Treasury yields rose slightly, although investor interest in safe-haven assets remained high amid ongoing trade tensions.

In agriculture markets, Chicago soybean futures bucked the trend, rising for the third consecutive session, buoyed by rising prices in Brazil and a weaker U.S. dollar. Despite this, the broader outlook remains volatile due to trade uncertainty and fluctuating currency movements.

The current selloff across oil and commodity markets highlights growing fears that an extended U.S.-China trade war could push the global economy toward recession, with lasting effects on consumption, investment, and market stability.