West Texas Intermediate (WTI) crude oil price fell for a second straight session, trading around $59.30 per barrel during Asian hours on Friday. The decline comes amid rising US-China trade tensions, which are clouding the demand outlook.

On Thursday, the US announced that tariffs on Chinese imports had surged to 145%, with a new 125% levy added on top of an existing 20% duty. This move overshadowed US President Donald Trump's 90-day pause on tariff hikes for most other countries and heightened concerns about fuel demand from China, the world's largest Oil importer.

A prolonged US-China trade dispute threatens to dampen global trade, disrupt supply chains, and slow economic growth—developments that would also curb Oil consumption in both nations, which are the world's top energy consumers.

The US Energy Information Administration (EIA) cut its global economic growth and Oil demand forecasts, warning that tariffs could significantly impact Oil prices. The agency now expects global Oil demand to grow by just 900,000 barrels per day (bpd) this year, down from its previous forecast of 1.2 million bpd, reaching about 103.6 million bpd. For 2026, demand growth is now estimated at 1 million bpd, also below prior expectations.

The EIA also revised down its oil price outlook for this year and next, citing increased uncertainty from weaker global growth and a potential rise in supply. Further weighing on prices, the OPEC+ alliance, including Russia, plans to raise output by 411,000 bpd in May, fueling concerns of a market surplus.

Meanwhile, the Trump administration imposed new sanctions on Iranian Oil networks, including a China-based storage facility, just days ahead of planned US-Iran talks. At the same time, the Keystone pipeline remains shut following a spill in North Dakota, with no timeline for reopening posing additional supply risks.

Source: Fxstreet