Oil prices plunged by 8% on Friday, heading for their lowest close since the middle of the pandemic in 2021, as China hit back in an escalating global trade war with the U.S. after President Donald Trump's 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 $4.70, or 6.7%, to $65.44 a barrel by 1314 GMT. U.S. West Texas Intermediate crude futures lost $5, or 7.5%, to $61.95. Brent and WTI fell to $64.15 $60.81 a barrel, respectively, earlier in the session, a four-year low.

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.

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.

Source: Investing.com