Oil prices fell nearly one percent on Tuesday as an escalating trade dispute between the United States and China triggered sharp selloffs in many global markets, Reuters reported.
Crude was also weighed down by expectations that producer cartel OPEC and key ally Russia will gradually increase output.
The United States and China are threatening punitive tariffs on each other’s exports, which could include oil supplies, putting pressure on shares markets.
Brent crude futures LCOc1 were at $74.69 per barrel at 0646 GMT, down 65 cents, or 0.9 percent, from their last close.
U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $65.24 a barrel, down 61 cents, or 0.9 percent.
Oil traders are closely watching a threat by China to react to U.S. tariffs by putting a 25 percent duty on U.S. crude oil imports, which have been surging since 2017 to a value of almost $1 billion per month.
“The tariff war between the U.S. and China is showing signs of escalating,” said Sukrit Vijayakar, director of energy oil consultancy Trifecta.
“China recently hinted that it may levy tariffs on (U.S.) crude imports as well. This could make a huge dent in the U.S. bid to export oil,” he added.
Energy consultancy Wood Mackenzie said the United States “would find it hard to find an alternative market that is as big as China”. It said China takes around 20 percent of all U.S. crude exports.