US crude oil falls 4% after the escalation of trade tensions between Trump and China threatens to slow global growth

US crude oil fell 4% on Friday, following President Donald Trump China threatened to impose higher tariffs In response to Beijing imposing stricter controls on the export of rare earth minerals.

US crude oil The futures price fell $2.61, or 4.24%, to close at $58.90 per barrel. Global standard Brent The price of oil fell $2.49, or 3.82%, to settle at $62.73 a barrel. Trade relations between China and the United States were thought to be slowly improving, but this latest setback has once again raised concerns that higher tariffs could slow the global economy and hurt oil demand.

Trump said on his social media platform, Truth Social: “I will have to, as President of the United States of America, financially confront their move.”

“One of the policies we are considering at this moment is a massive increase in tariffs on Chinese products coming into the United States of America,” the president said. “There are several other countermeasures that are also under serious consideration.”

Trump’s comments The stock market was knocked down On Friday, investors were reluctant to take risks due to this renewed threat to the global economy.

“When the market sees these tit-for-tat actions, for the oil market, that translates into slower growth and perhaps even lower demand,” Andy Lipow, president of Lipow Oil Associates, told CNBC.

Oil prices have also been under pressure as OPEC+ has been increasing supplies to the market for months.

“Oil prices rose last month, demand for crude oil fell significantly amid refinery maintenance, and inventory build is about to begin,” said Matt Smith, oil analyst at Kpler.

It appears that the ceasefire between Israel and Hamas has entered into force in Gaza. The oil market has witnessed repeated fluctuations over the past two years regarding the risk of the Gaza war turning into a regional conflict that could disrupt crude supplies.

“Market participants are seizing the opportunity to basically say, ‘We can move on from geopolitics and refocus on the supply picture,’” Helima Croft, head of global commodities strategy at RBC Capital Markets, told CNBC.