Occidental Petroleum (OXY) saw its stock price plummet 5.22% in pre-market trading on Friday, as the oil industry faces multiple headwinds from escalating trade tensions and increased global supply. The sharp decline comes as crude oil prices are heading towards their lowest levels since the depths of the coronavirus pandemic in 2021.

The primary catalyst for the sell-off appears to be the recent trade war escalation between the United States and China. U.S. President Donald Trump's announcement of new tariffs on Wednesday sent shockwaves through global financial markets. China retaliated on Friday by declaring additional tariffs of 34% on all U.S. goods, further exacerbating concerns about global economic growth and oil demand. While oil and gas imports were exempted from Trump's tariffs, the broader economic impact is expected to weigh heavily on the energy sector.

Adding to the bearish sentiment, the Organization of the Petroleum Exporting Countries and its allies (OPEC+) announced plans to increase oil output. The group now aims to return 411,000 barrels per day to the market in May, up from the previously planned 135,000 bpd. This decision, coupled with the trade tensions, has led to a significant drop in oil prices, with Brent crude falling 5% to $66.66 a barrel and WTI crude declining 5.3% to $63.40. As a major oil producer, Occidental's stock price is particularly sensitive to these market dynamics, explaining the company's substantial pre-market decline.