Oil sinks further amid tariff turmoil as Saudi Arabia slashes prices

Oil prices spiraled almost 3% on Monday after plummeting 11% last week as a trade war sparked a market-wide sell-off over fears of cratering demand.

Additionally, over the weekend, Saudi Arabia cut its crude export prices to its Asian buyers by $2.30 per barrel for May, just days after the Organization of Petroleum Exporting Countries and its allies, announced a greater-than-expected output raise next month.

West Texas Intermediate (CL=F) futures briefly dropped below $60 per barrel for the first time since 2021 while Brent (BZ=F), the international benchmark hovered above $63 per barrel.

Some Wall Street analysts see a floor on prices ahead.

"We see incentive for defense at $60/b, both from a perspective of OPEC+ budgets and from the perspective that the US Administration likely wants to protect the economics of the US shale industry," Citi analysts wrote in a note on Monday morning

Energy related equities (XLE) have led the market declines since President Trump announced sweeping tariffs last Wednesday afternoon.

Last Friday WTI plummeted more than 7% after China, the biggest importer of crude announced it will slap additional tariffs of 34% on US goods in reaction to the Trump administration's sweeping levies.

The levies announced by President Trump last Wednesday sparked a global stock market sell-off. Crude plummeted more than 6% on Thursday, despite energy being exempt from sweeping duties on imports from US trading partners.

"The tariffs, if they stay in place, would be a big hit to the US and global growth, likely pushing the US and global economy into recession this year," wrote JPMorgan's Natasha Kaneva on Friday morning.

Crude losses deepened on Thursday after the Organization of Petroleum Exporting Countries and its allies, OPEC+, agreed to hike supply by about three times more than previously signaled, or more than 400,000 barrels per day, beginning in May.

Read more: What Trump's tariffs mean for the economy and your wallet

Goldman Sachs analysts lowered their price forecast for 2025 by $4 on Sunday night, just days after reducing it by $5.

"We reduce our oil price forecast further as we incorporate our economists’ GDP downgrades from the last few days, including the forecast of a stagnating US economy," wrote Daan Struyven, Goldman Sachs co-head of global commodities research.

The analysts sees Brent at an average of $62 in 2025, and WTI at $58.

Ines Ferre is a Senior Business Reporter for Yahoo Finance. Follow her on X at @ines_ferre.

Click here for in-depth analysis of the latest stock market news and events moving stock prices

Read the latest financial and business news from Yahoo Finance