Oil prices fell sharply in the global commodities market on an expected increase in supply from the Organization of Petroleum Exporting Countries and allies’ members, OPEC+. Brent crude price hovering at $70 at the last look on Tuesday while US West Texas Intermediate fell to $67 at the same time.

Pressures on prices resume amidst tariff combat initiated under the U.S. President Donald Trump administration and quest to force energy costs downward. Oil prices were under pressure, with ICE Brent settling more than 1.6% lower yesterday, ING said in a note today.

The latest price slump followed news that OPEC+ plans to gradually increase supply from April by 138,000 barrels per day in the month. Analysts said the market had been pricing in the possibility that the group might delay an increase in supply.

“This development hasn’t changed our view on the market, as we already thought supply would return,” ING stated. The Bank added that the increase is likely to make President Trump happy, given the pressure he’s been putting on OPEC to boost supply.

According to a Bloomberg survey, OPEC oil production increased by 320,000 barrels per day (b/d) month on month in February to 27.35 million barrels per day. The bulk of the increase was driven by Iraq, with output growing by 150,000 b/d to 4.16 million b/d, leaving production above its target level of 4 million b/d.

Fairly sizable increases were also seen in Libya, Venezuela and the UAE. Meanwhile, there are growing concerns about demand levels amid uncertainty about tariffs. The Atlanta Fed’s GDPNow model suggests first quarter GDP will contract by 2.8%. Just 4 weeks ago, the model was forecasting growth of 3.9%.

Trump increased tariffs on China to 20% from 10%, while also allowing 25% levies to go ahead for Canada and Mexico starting today.

For Canadian energy, the tariff is set lower at 10%. ING said given the lack of alternative export capacity for Canadian oil, discounts for Canadian crude will increase thanks to these tariffs. European natural gas prices strengthened yesterday, with TTF settling just over 2% higher on the day. The increase reflects diminishing hopes for a Russia-Ukraine peace deal.

Meanwhile, storage levels in the EU stand just under 38% full, compared to 62% last year and a 5-year average of 49%. Given the larger task of refilling storage this year, we expect European gas prices to remain well supported.

The risk to this view would be a relaxation in storage targets or a peace deal that leads to the resumption of some Russian pipeline gas flows to Europe.