In a significant downturn for the energy market, oil prices continued their decline on Monday as U.S. President Donald Trump signaled his intention to advance extensive global tariffs. This announcement comes during a period of increasingly volatile stock markets and growing concerns about a potential recession.

By 10:56 AM BST, Brent crude prices tumbled by 3.48 percent, settling at $63.30 a barrel. This represents a staggering 15 percent drop over the past five days, highlighting deepening anxieties that the global economy may be on the brink of a sharp slowdown. The market's reaction underscores the fear that Trump's tariffs could further disrupt trade and economic stability.

Last Wednesday, Trump declared what he referred to as “liberation day” regarding these tariffs, which was immediately followed by an unexpected decision from the OPEC+ coalition to increase oil output. This duality of events has only compounded the uncertainty within the oil market, with analysts predicting a potentially grim outlook for global economic health.

“I think this is very serious. I don’t think we are in a 2008 world yet, but we are definitely expecting a significant deceleration in the global economy this year,” stated Jorge Leon, head of geopolitical analysis at Rystad Energy. His comments reflect a growing consensus among economists that the current trajectory of economic performance is troubling.

In a recent analysis, Goldman Sachs downgraded their oil price forecasts in light of economists projecting a “stagnating” U.S. economy along with an increased risk of recession. They have revised their expectations for oil prices, anticipating that Brent crude will average around $58 a barrel by 2026, while West Texas Intermediate prices are projected at $55 a barrel. The firm noted, “The risks to our reduced oil price forecast remain to the downside, because recession risk has grown further and because OPEC+ supply may rise more than we assume.”

Moreover, Goldman Sachs adjusted its estimate of the likelihood of a recession in the U.S. within the next 12 months, increasing it from 35 percent to 45 percent. They indicated that their forecasts would shift to reflect a recession should the White House implement the majority of the tariffs proposed on April 9.

Adding to the negative sentiment, Morgan Stanley issued a note this morning indicating that the 12.5 percent drop in Brent crude prices observed from the end of Wednesday through Friday last week had only occurred 24 times in the past, with 22 of those instances coinciding with recessions. As a result, Morgan Stanley has lowered its base case forecast for oil demand for the latter half of the year by approximately 550,000 barrels per day. They revised their previous Brent price forecast from the 'high $60s' range to a more conservative 'low $60' outlook.

Complicating matters further, eight OPEC+ members have decided to expedite their plans for reversing production cuts, which will see an increase in output by 411,000 barrels per day in May, a significant rise from their earlier target of 122,000 barrels per day. This decision appears to be a response to ongoing tensions among member countries regarding adherence to production agreements, with Kazakhstan notably exceeding its production quota.

The reverberations of these developments were felt in the stock market, where shares of major UK-listed oil producers experienced substantial declines. Shell saw a drop of 7 percent, while BP fell by 6 percent, both underperforming in comparison to the broader market trends.