Oil prices recorded a notable increase driven by the announcement of a temporary suspension of tariffs between the United States and China, two of the world’s largest oil consumers. The commercial détente between the two economic powers was announced in Geneva after two days of negotiations.
Tariffs reduced to 30% for Washington and 10% for Beijing
The suspension applies to nearly all tariffs implemented since the trade escalation began in early April. Washington agreed to lower its tariffs to 30% from 145%, while Beijing reduced its own to 10% from 125%. The measure will take effect “by May 14”, according to a joint statement.
The trade war had weighed on global economic outlooks, leading to a decline in oil demand. “This trade war has been very harmful to oil demand prospects,” said John Kilduff, analyst at Again Capital, to AFP. He noted that China, the world’s largest oil importer, had been particularly affected.
Oil markets react moderately to the announcement
Brent crude from the North Sea, for July delivery, rose 1.64% to reach $64.96, while West Texas Intermediate (WTI), for June delivery, gained 3.23% to $61.95. Despite the rise, gains remained lower than those seen on stock exchanges due to the temporary nature of the suspension, limited to 90 days.
According to Arne Lohmann Rasmussen, analyst at Global Risk Management, the market remains cautious. He pointed to the stance of the Organization of the Petroleum Exporting Countries and its allies (OPEC+), which continues to pursue a strategy of increasing supply. “One of the strongest headwinds is OPEC+’s willingness to put more barrels on the market,” he stated.
Donald Trump expected in Saudi Arabia
Market attention is now turning to U.S. President Donald Trump’s upcoming visit to Saudi Arabia. Statements regarding OPEC+ production, oil prices, and potential measures related to Iran are expected. These developments could reshape market expectations in the coming days.
