NEW YORK, April 4 (Reuters) - Shares of U.S. refiners

fell to two-year lows on Friday in the wake of U.S. President

Trump's announcement of new tariffs, as fears of slower oil and

fuel demand and weakening refining margins rattled investors.

Top refiners Marathon Petroleum ( MPC ), Valero Energy ( VLO )

and Phillips 66 have shed more than $20 billion

in market capitalization since Trump announced sweeping new

tariffs on Wednesday afternoon, based on LSEG data.

"We consider the adoption of the 'reconciliatory tariffs'

will result in weaker global GDP growth and so lower oil demand

growth, oil prices and weaker refining margins, as exemplified

by the futures markets over recent days," Alan Gelder, vice

president of refining, chemicals and oil markets at Wood

Mackenzie.

Crude oil futures were at their lowest in four years and

heading for their biggest weekly losses in percentage terms in

more than two years amid fears of escalating trade war as China

ramped up tariffs on U.S. goods.

Brent futures dived nearly 8% to $64.59 a barrel by

10:39 a.m. ET (14:39 GMT) while U.S. West Texas Intermediate

crude futures lost almost 9% to $61.04.

The refining sector is already over-supplied and so its

margin recovery is heavily dependent upon the trajectory for

demand growth, Gelder said.

Global gasoline demand is expected to peak this year at

around 28 million barrels per day amid surging electric vehicle

adoption and improving vehicle efficiency, particularly in

China, the world's largest oil importer, according to S&P Global

Commodity Insights. Diesel demand is likely already declining

after reaching 29 million barrels per day last year.

"We are now expecting much lower demand growth in 2025 and

in 2026, so not only do the tariffs stall the recovery in

refining margins we previously forecast in 2026, but they also

drive refining margins lower, perhaps back to 2021 levels,"

Gelder said.

Shares of Marathon Petroleum ( MPC ), which is the top U.S. refiner

by volume, were down around 8% at $118.33, the lowest since July

2023, on Friday morning.

Valero Energy ( VLO ), which is the second-largest U.S. refiner by

capacity, fell around 9% to $104.32, the lowest since May 2023.

Phillips 66's shares slid around 9% to $97.49, the lowest

since July 2023.

Meanwhile, the energy index sank around 6% on

Friday.

The new tariffs are fueling a trade war that will weigh on

the global economy and the consumption of refined products

including diesel and gasoline, analysts said.

"While crude oil and refined products have been range-bound

for most of the year battling the constant tariffs and sanctions

hot air, this implementation of sweeping tariffs has forced the

market to re-examine demand," energy analysts at Rabo Bank said

in a note.