Oil prices continued their downward slide on Wednesday, heading for their most significant monthly drop in over three years, as trade tensions between the U.S. and China darkened the global demand outlook and rising supply fears added further pressure.

Brent crude slipped 72 cents, or 1.12%, trading at $63.53 per barrel as of 0404 GMT. Meanwhile, U.S. West Texas Intermediate (WTI) crude fell by 70 cents, or 1.16%, to $59.71 a barrel.

This month alone, Brent has shed 15% of its value, while WTI has dropped 16%—marking their sharpest monthly percentage losses since November 2021. The declines intensified after U.S.President Donald Trump’s April 2 announcement of sweeping tariffs on all imported goods, sparking a tit-for-tat response from China and escalating trade tensions between the world’s top two oil consumers.

Economists surveyed by Reuters now fear the tariffs could tip the global economy into recession. Supporting that concern, data released Wednesday revealed China’s manufacturing sector shrank at its fastest rate in 16 months, while U.S. consumer confidence also plunged in April to its lowest level in nearly five years.

Daniel Hynes, senior commodity strategist at ANZ, noted that trade uncertainty continues to sap investor confidence. He warned that recent signs of strength in the U.S. economy may have been short-lived, driven by pre-tariff inventory buildup that is now fading.

Although there have been some attempts by the Trump administration to soften the impact—such as easing auto tariffs—analysts say downward pressure on oil is likely to persist, especially as the White House continues to favor lower oil prices to help contain inflation.

Adding to the bearish tone, concerns over rising supply from the OPEC+ alliance have resurfaced. Sources told Reuters that several members plan to advocate for further production increases at the group’s upcoming meeting on May 5.

Meanwhile, U.S. crude inventories rose by 3.8 million barrels last week, according to the American Petroleum Institute. Official figures from the U.S. Energy Information Administration are due later on Wednesday, with analysts expecting a more modest 400,000-barrel build.