The market meltdown is reaching beyond stocks, as the latest batch of US tariffs pummels crude prices to a seven-month low. A surprise decision from the Organization of the Petroleum Exporting Countries is further bruising oil traders.

US crude tanked 7.63% around midday Thursday, hitting $66.25 per barrel. Brent crude , the international benchmark, plummeted 6.96%.

Investors are reacting to a double whammy that began with a major escalation of President Donald Trump's trade war. On Wednesday, the White House announced a slate of higher-than-expected tariffs on a list of world economies, amplifying growth fears .

The chance of a recession now stands as high as 53% on betting markets such as Kalshi , and rate-cut bets have jumped as traders see the Fed slashing borrowing costs to blunt the impact of a recession.

This anxiety has an indirect impact on oil products, said David Morrison, the senior market analyst at Trade Nation.

"Energy imports are largely unaffected tariff-wise," he said. "But investors were reacting to the estimated damage these tariffs could do to global trade, and therefore global economic growth."

To make matters worse, OPEC+ announced that eight of its members would boost crude production by 411,000 barrels a day next month. Though the cartel was expected to end some of its production cuts, the increase is three times the amount previously indicated.

The group spent years holding back production in a failed effort to boost energy prices that support member economies. OPEC delegates told Bloomberg the output boost was an effort to penalize other members who hadn't kept to agreed-upon quotas. In the past, this has included Kazakstan and Iran .

The action may be to Trump's benefit, as the president has called on OPEC to help reduce crude pricing. But it could reignite worry of a supply glut in the global market , especially if a recession weighs down on energy demand.

Read the original article on Business Insider