Oil futures plummeted by more than 7% on Thursday morning due to the impact of Trump's tariffs on financial markets. Additionally, new developments in global oil supply indicated that the balance in the international oil market would continue to face challenges.

At around 11 a.m. ET on Thursday, the price of West Texas Intermediate (CL=F) crude oil, the US benchmark, dropped by over 7.5% to trade at approximately $66.10 per barrel. Meanwhile, Brent (BZ=F) crude oil, the global benchmark, saw a decline of more than 7% trading below $70 a barrel.

According to Dennis Kissler, senior vice president for trading at BOK Financial Securities, the current panic selling may be an exaggerated response to the situation, but uncertainties in the short term are causing many investors to unwind their positions.

In response to Trump's tariff announcement, the Organization of Petroleum Exporting Countries and its allies, OPEC+, agreed to increase oil supply more than initially anticipated starting in May.

The decision to raise production by 411,000 barrels per day is putting further pressure on oil prices, following losses triggered by the tariffs imposed by the Trump administration on trading partners.

The situation has raised concerns about global demand as the new trade arrangements could potentially slow down economic growth worldwide, particularly given the substantial tariffs on China, which is a major oil importer.

Before these developments, oil prices were on an upward trend as actions taken by the Trump administration, such as pressuring Iran for a nuclear deal and imposing tariffs on imports from countries purchasing crude oil from Russia, pointed towards a tighter global oil supply scenario.