Oil prices climbed about 2% to a two-week high on Monday after the U.S. and China agreed to temporarily slash tariffs, raising hopes of an end to the trade war between the world’s two biggest economies.
Brent crude futures rose $1.35, or 2.1%, to $65.26 a barrel by 11:39 a.m. EDT (1539 GMT), while U.S. West Texas Intermediate (WTI) crude gained $1.40, or 2.3%, to $62.42.
The U.S. and China reached a better-than-expected deal to temporarily slash tariffs, sending Wall Street stocks, the U.S. dollar and crude prices sharply higher, as the world’s two biggest oil consumers seek to end a damaging trade war that has stoked fears of recession.
“This was a larger-than-expected de-escalation and represents an upgrade to the outlook, though the negotiation process will likely remain challenging,” analysts at bank ING said in a note.
Oil prices fell to a four-year low in April due primarily to worries about what the U.S.-China trade war would do to global economic growth and oil demand, while at the same time the Organization of the Petroleum Exporting Countries (OPEC) decided to boost oil output by more than previously expected.
In Saudi Arabia, the biggest producer in OPEC, oil giant Aramco said it expects oil demand to remain resilient this year and sees further upside if the U.S. and China successfully resolve their trade dispute.
One factor that could lower oil prices was the ongoing talks between the U.S. and Iran over Tehran’s nuclear program.
Iran is the third biggest producer in OPEC and any nuclear deal could reduce sanctions and boost the amount of oil Iran could export.
Another factor that could lower oil prices was the potential for U.S.-brokered talks between Russia and Ukraine.
Ukrainian President Volodymyr Zelenskiy said he was ready to meet Russia’s Vladimir Putin in Turkey on Thursday after U.S. President Donald Trump told him publicly to immediately accept the Kremlin leader’s proposal of direct talks.
Trump raised the prospect of joining talks between Russia and Ukraine in Turkey.
Russia was the world’s second biggest oil producer in 2024, according to data from the U.S. Energy Information Administration.
Any deal between Moscow and Ukraine could reduce sanctions on Moscow and boost the amount of oil Russia can export.
The military operations chiefs of India and Pakistan spoke by phone, the Indian army said, as New Delhi reopened airports and shares rose in both countries following a ceasefire that paused days of intense fighting last week.
India is the world’s third biggest consumer of oil.
Source : Reuters
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