Oil gains as US shows willingness for China trade deal

13 Oct 2025 11:08
13 Oct 2025 11:14

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Oil gains as US shows willingness for China trade deal

Photo: Bloomberg

Oil prices climbed after President Donald Trump’s administration indicated a willingness to reach an agreement with China to ease renewed trade tensions between the world’s two largest oil consumers.

Brent advanced above $63 a barrel after plunging 3.8% on Friday in its biggest drop since August, while West Texas Intermediate was near $60, News.Az reports, citing Bloomberg.

Trump on Friday announced an additional 100% tariff on China as well as export controls on “any and all critical software” beginning Nov. 1, following moves by Beijing to add new port fees on US ships and curbs on exports of rare earths and other critical materials. On Sunday, Trump indicated willingness to reach a deal, while Beijing urged Washington to negotiate and said it wouldn’t hesitate to retaliate against threats.

“We’ll be fine with China,” the US president told reporters on Air Force One in early Asian hours on Monday, although the tariffs on Nov. 1 remained the plan. He also said he’d consider arming Ukraine with long-range Tomahawk missiles that would allow strikes deeper into Russia, which increases the risk of further disruptions to oil supply from the OPEC+ member.

“The market had priced in a worst-case scenario, so even a softer tone from Trump gives crude room to breathe,” said Haris Khurshid, Chicago-based chief investment officer at Karobaar Capital LP. “But this feels more like a positioning rebound than a real shift. Traders are just covering after last week’s selloff. Unless we see actual progress on trade, the upside probably fades quickly.”

China’s move to levy fees on US-owned vessels arriving at its shores prompted last-minute cancellations across vessel types including oil tankers, leading to a jump in shipping rates. The taxes, which take effect from Oct. 14, mirror those implemented by Washington on Chinese vessels as the Trump administration takes aim at the Asian nation’s dominance in global logistics and shipbuilding.

The measures have added uncertainty to the outlook for oil, which has dropped over the past two weeks as the Organization of the Petroleum Exporting Countries and its allies add barrels to the market, threatening to exacerbate a glut that is forecast for later this year. Meanwhile, the fragile ceasefire agreement between Israel and Hamas has reduced concerns about a flare-up in fighting in the Middle East, the source of a third of the world’s crude.

News.Az