Risks of US tariffs against China rising to 104% caused oil prices to slump to 4-year low

Oil prices dropped nearly 4% during early Wednesday trading amid an escalating tariff standoff between the United States and China, Reuters reports. The prices hit the lowest level in more than 4 years, having fallen for five consecutive sessions.

The rapid decline in the cost of oil over the past few days has been driven by growing investor concerns about the balance of supply and demand in the global market. Last week, Donald Trump announced an increase in import duties against his trading partners, including China. The Chinese authorities immediately retaliated.

Such a turn of events does not fit with the plan of the US President, and he threatened to increase duties on China by another 50% in order to achieve the elimination of the Asian country's tariffs. Thus, the US trade restrictions against China could reach 104%, Reuters notes.

Since China refused to make concessions, the oil market is getting seriously concerned about the volume of future oil global demand under the current circumstances. The situation is aggravated by the US and OPEC+ efforts to increase oil production, the agency's experts add. As a result, oil prices are falling rapidly.