U.S. oil prices fell sharply, briefly dipping below $60 a barrel on Sunday — their lowest level in almost four years — as the economic fallout from President Trump’s latest round of tariffs reverberated around the world.
Crude oil now costs around 15 percent less than it did last Wednesday, just before Mr. Trump revealed his plans to impose stiff new tariffs on imports from most countries. That prices have fallen so far so quickly reflects deepening concern that high tariffs could slow economic growth and perhaps even cause recessions in the United States and the countries it trades with.
Cheaper oil is generally good for consumers and businesses that use gasoline, diesel and jet fuel. In fact, Mr. Trump and his aides have pushed for lower energy prices to curb inflation.
But if prices remain around these levels or fall further, U.S. oil and gas companies are likely to slow drilling, cut spending and lay off workers. That would be especially painful to oil-rich states like Texas and New Mexico.
Another big reason that oil prices have weakened is that the OPEC cartel and its allies announced last week that they would accelerate plans to increase production. That will increase supply of oil at a time when many analysts expect demand to weaken.
U.S. energy companies are also getting squeezed by higher costs for essential materials like steel tubing, which is subject to a 25 percent tariff Mr. Trump announced in February.
Smaller oil companies — a key constituency for Mr. Trump — are likely to be among the first to slow down, as they tend to be more nimble and have fewer financial resources. Natural gas prices have been more resilient, providing some cushion for producers.
Last week, the share price of an exchange-traded fund composed of U.S. oil and gas stocks fell by 20 percent in the two days after Mr. Trump’s tariff announcement.