Oil prices climbed to a two-week high on Monday, lifted by renewed optimism after the United States and China agreed to ease some of the tariffs that had weighed heavily on the global economy.
The move revived investor confidence and gave a fresh boost to energy markets.
Prices for both Brent crude and West Texas Intermediate (WTI) crude ended the day higher. Brent settled at $64.96 per barrel, while WTI closed at $61.95, marking their highest levels since late April. The rebound follows a tense period when fears of a prolonged trade war between the world’s top two oil consumers drove prices to their lowest in four years.
The temporary truce in the tariff conflict also had a ripple effect across financial markets. Wall Street stocks rose, the dollar strengthened, and oil demand expectations improved. Investors responded positively to the pause in hostilities, hoping it could be the first step toward a broader agreement between Washington and Beijing.
The oil market had been under pressure earlier this year, not only from trade worries but also due to growing concerns about weak global demand. In April, a sharp drop in prices signaled just how worried traders were about a potential recession. Monday’s gains suggest a shift in mood, but traders remain cautious as negotiations between the US and China continue.
Meanwhile, the supply side of the oil market is also shifting. Saudi oil giant Aramco said it believes global demand will remain strong through the year. Iraq’s oil exports are expected to decline in the coming months, which could tighten supplies. In Norway, production was briefly halted at the Johan Castberg oilfield for repairs, offering further upward support to prices.
Shipping routes are also playing a role. Crude exports from the Black Sea region are expected to fall slightly in May, and Mexico is planning to send more oil to its new Olmeca refinery, reducing the amount available for export.
On the geopolitical front, tensions and diplomacy are both influencing oil. Talks between the US and Iran over the nuclear deal could lead to sanctions being lifted, allowing Iran to increase its oil exports. Russia could also see fewer trade restrictions if ongoing negotiations with Ukraine, possibly mediated by US President Donald Trump in Turkey, lead to a peace agreement. That could bring more Russian crude back into the market.
India’s Prime Minister Narendra Modi also made headlines with strong words toward Pakistan, warning of further military action if cross-border attacks continue. As the world’s third largest oil consumer, any conflict involving India could influence global energy flows.
For now, the easing of tariffs has offered a welcome relief for oil markets. But with global politics, supply shifts, and delicate negotiations still in play, the road ahead remains uncertain.