Oil majors saw their stocks nosedive as the one-two punch of US President Donald Trump’s sweeping tariffs and OPEC+ production increases punished global markets and sent benchmark crude prices to their lowest levels in years.
Analysts have also lowered their oil forecasts for 2025 in anticipation of weak demand induced by the trade war and larger supplies from the OPEC+ hike.
BusinessDay’s findings showed the Dow Jones US Oil & Gas Index fell nearly 9 percent Friday and dropped 15.8 percent over the last two days. Meanwhile, the S&P Oil & Gas Exploration & Production Select Industry Index contracted 10.7 percent Friday and more than 20 percent in two days.
US giants such as ConocoPhillips (-18.7%), Occidental (-17.8%), Chevron (-14%) and ExxonMobil (-12%) all posted two-day drops in the double digits.
European majors endured similar falls, including BP (-16%), Shell (-11.8%), TotalEnergies (-10.4%) and Eni (-9.6%%). Middle East titan Saudi Aramco fared much better at a 1.13% loss.
In the broader markets, the Dow Jones Industrial Average fell 2,200 points Friday, or 5.5 percent. The S&P 500 was down nearly 6 percent, and the Nasdaq Composite shrunk by 5.8 percent.
Brent crude futures fell another 5.7 percent Friday to $66.15 per barrel after a similar drop Thursday. West Texas Intermediate (WTI) crashed 6.6 percent to $62.54.
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A day after a modest gain, Henry Hub futures stumbled 7.5 percent Friday to $3.83 per million British thermal units.
Brent has posted a 9.6 percent loss in 2025 and a nearly 18 percent loss over the last year, said Ole Hansen, head of commodity strategy at Saxo Bank. Meanwhile, losses for WTI are nearly 12 percent in 2025 and 18.3 percent over the last 12 months.
Though Trump’s latest tariffs spared energy exports, they were “far larger than expected” and will cause chaos across global economies and supply chains, with energy and industrial metals being most at risk for demand drops, Hansen said.
“At this stage, we have not only entered a demand destruction phase, but also supply destruction from high-cost producers, which over time will help cushion the fall,” Hansen said.
Profitability for US shale producers is in jeopardy, Hansen noted, pointing to a recent survey from the Federal Reserve Bank of Dallas suggesting break-evens of around $65 per barrel of WTI for US shale operators.
“With crude oil prices under pressure, US production risks stalling sooner than anticipated, potentially allowing key OPEC+ members to regain lost market share,” Hansen said.
Forecasts down
Goldman Sachs revised its oil forecast downward Thursday for both Brent and WTI. It projects Brent will average $69 per barrel in 2025, down from its previous $73 estimate. Meanwhile, the bank says WTI will drop $3 to $66.
The bank also reduced its global demand growth forecast to 600,000 barrels per day in 2025, down from 900,000 bpd.
“Given elevated recession risk, the risks to our revised oil demand assumptions remain to the downside,” the Goldman Sachs forecast said.
HSBC trimmed its 2025 demand growth forecast by about 100,000 bpd to 900,000 bpd for the year.
Read also: The implications of Trump’s reciprocal tariffs for Nigeria and Africa
Morgan Stanley said it is sticking with its $67.50 forecast for Brent for the second half of 2025 “until further clarity emerges” from the trade war. The bank is projecting oil demand of 900,000 bpd and a surplus of about 800,000 bpd for the rest of 2025.
If the tariffs trigger a recession, year-over-year demand growth “could fall at least to zero”, assuming trends from prior recessions in 1990-1991 and 2001 repeat, a Morgan Stanley note said.
“Still, much is uncertain for now, both on the demand side as well as regarding the eventual impact on Opec production — a quota increase is not the same as an actual production increase,” the Morgan Stanley note said.
OPEC+ shocks
Though the trade war triggered the broader market plunges, the bigger blow to the oil industry was the surprise OPEC+ decision to accelerate crude output by 411,000 barrels per day starting in May, Francesco Gattei, Eni chief financial officer told Reuters.
“Why are OPEC+ doing this? We struggle to arrive at a satisfactory answer,” Redburn Atlantic analyst Stuart Joyner mused in a Friday note.
Added Joyner: “Several ‘theories’ have been advanced — a concession to Trump to try and dampen the inflationary pressure of tariffs, a change of strategy to take market share and kill off [US] shale — but none are entirely satisfactory. What matters more than the ‘why’ is the consequences, and they look increasingly negative for the oil price and therefore the sector.”
In its latest projections, Goldman Sachs mused that Opec+ raised production for two reasons: inventories are “quite low”, and global markets are shifting from Opec+ supporting spot balances to a “more long-run equilibrium” where Opec+ is focused on member compliance and “strategically disciplining” non-Opec supply.
In a note, HSBC said it wouldn’t rule out OPEC+ pausing its hikes if Brent settles well into the $60-per-barrel range.
OPEC+ might be predicting supply disruptions from US sanctions on Iran or US tariffs on Venezuela and potentially Russia, HSBC said. US attempts to revoke oil production licences in Venezuela could drop the country’s production by 130,000 bpd.
The coalition may also be punishing over-producers, notably Kazakhstan, where oil output jumped by about 300,000 bpd in February after the ramp-up of Chevron’s Tengiz expansion project, HSBC said. However, Kazakh supply could fall should Russia’s limitations of oil exports linger.
If supply disruptions happen while greater summer demand materialises, “oil prices are unlikely to stay below $70 for long”, said Mukesh Sahdev, global head of oil markets for Rystad Energy.