Goldman Sachs lowered its forecast for Brent crude’s average price this year by 5.5% to $69 a barrel and for WTI prices by 4.3% to $66, citing the risks of higher OPEC+ supply and the global trade war triggering a recession.

The Wall Street brokerage also chopped its 2026 average price forecast for Brent by 9% to $62 and for WTI by 6.3% to $59, and warned that the new estimates could be lowered further.

“The risks to our reduced oil price forecast are to the downside, especially for 2026, given growing risks of recession and to a lesser extent of higher OPEC+ supply,” Goldman analysts said in a note.

Brent crude was priced at $69.59 a barrel as of 0408 GMT on Friday, while WTI was at $66.39.

Crude prices posted their biggest percentage drops since 2022 on Thursday after U.S. President Donald Trump slapped reciprocal tariffs on many countries and eight OPEC+ members unexpectedly advanced their plan to phase out production cuts by boosting output in May.

The latter, said Goldman, showed OPEC’s flexibility to rapidly implement large output hikes, which diminished the likelihood of a price boost in the short term from lower supply.

The brokerage said it now expects oil demand to grow by only 600,000 barrels per day (bpd) this year, down from its previous forecast of 900,000 bpd, and to increase by 700,000 bpd in 2026.

Oil prices plunged 7% on Friday to settle at their lowest in over three years as China ramped up tariffs on U.S. goods, escalating a trade war that has led investors to price in a higher probability of recession.

China, the world’s top oil importer, announced it will impose additional tariffs of 34% on all U.S. goods from April 10. Nations around the world have readied retaliation after Trump raised tariff to their highest in more than a century.

Commodities including natural gas, soybeans and gold also dived, while global stock markets tumbled. Investment bank JPMorgan said it now sees a 60% chance of a global economic recession by year-end, up from 40% previously.

Global benchmark Brent futures settled $4.56, or 6.5%, lower at $65.58 a barrel, while U.S. West Texas Intermediate crude futures lost $4.96, or 7.4%, to end at $61.99.

At the session low, Brent fell to $64.03 and WTI hit $60.45, their lowest in four years.

For the week, Brent was down 10.9%, its biggest weekly loss in percentage terms in a year and a half, while WTI posted its biggest decline in two years with a drop of 10.6%.

Trump’s new tariffs are “larger than expected” and the economic fallout, including higher inflation and slower growth, likely will be as well, Federal Reserve Chair Jerome Powell said in remarks that pointed to the potentially difficult set of decisions ahead for the U.S. central bank.

Further pressuring oil prices, the Organization of the Petroleum Exporting Countries and allies (OPEC+) decided to advance plans for output increases. The group now aims to return 411,000 barrels per day (bpd) to the market in May, up from the previously planned 135,000 bpd.

A ruling by a Russian court that the Caspian Pipeline Consortium’s (CPC) Black Sea export terminal facilities should not be suspended also pressured prices lower. That decision could avert a potential fall in Kazakhstan’s oil production and supplies.

Imports of oil, gas and refined products were given exemptions from Trump’s sweeping new tariffs, but the policies could stoke inflation, slow economic growth and intensify trade disputes, weighing on oil prices.

Goldman Sachs analysts responded with sharp cuts to their December 2025 targets for Brent and WTI by $5 each to $66 and $62 respectively.

“The risks to our reduced oil price forecast are to the downside, especially for 2026, given growing risks of recession and to a lesser extent of higher OPEC+ supply,” the bank’s head of oil research, Daan Struyven, said in a note.

HSBC trimmed its 2025 global oil demand growth forecast from 1 million bpd to 0.9 million bpd, citing tariffs and the OPEC+ decision.

Money managers raised their net long U.S. crude futures and options positions in the week to April 1, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.