In a dramatic turn of events, global oil markets roared back to life on Monday, with prices surging more than 3% after the United States and China announced a temporary suspension of their escalating tariff war.
The breakthrough, described by analysts as a rare moment of de-escalation in a trade conflict that has roiled economies for months, sent Brent crude climbing 3.4% to $67.68 per barrel and West Texas Intermediate (WTI) jumping 3.6% to $63.24.
The rally, one of the sharpest in recent weeks, reflects renewed investor confidence that the world’s two largest oil consumers may be stepping back from the brink of an economic standoff that threatened to derail global demand.
The agreement, brokered over the weekend and confirmed by U.S. Treasury Secretary Scott Bessent, marks a 90-day pause in the tit-for-tat tariffs that had driven U.S. duties on Chinese imports to a staggering 145% and China’s retaliatory levies to 125%. Under the truce, U.S.
Tariffs on most Chinese goods will drop to 30%, while China’s will fall to 10%, signaling a mutual desire to avoid what Bessent called “the equivalent of an embargo.” The announcement, made public late Sunday, triggered a wave of optimism across commodity markets, with copper, soybeans, and European gas also posting gains, though gold bucked the trend, falling 3.3%.
For oil traders, the news was a lifeline. Just weeks ago, crude prices had plummeted to four-year lows, with Brent dipping to $60.41 and WTI to $57.06, as fears of a global recession loomed large amid the U.S.-China trade war.
The tariffs, which disrupted supply chains and raised costs for everything from consumer electronics to industrial machinery, had dampened demand forecasts, with OPEC slashing its 2025 global oil demand growth estimate by 150,000 barrels per day.
The specter of oversupply, compounded by OPEC+’s decision to boost output by 411,000 barrels per day starting in May, further battered prices.
Monday’s rally, however, suggests markets are betting on a rebound in demand.
WHAT YOU SHOULD KNOW
For now, the oil market is riding a wave of relief. Energy traders are closely watching the $OIL charts, with some calling the surge a “demand boost” signal.
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