Oil prices rose on Friday after China expressed its openness to engage in talks with the United States on tariffs, raising hopes of a de-escalation in the trade war between the world’s two largest economies.
As of 4:34 GMT, Brent crude futures gained 0.64 percent to $62.53, while U.S. West Texas Intermediate crude futures rose 0.71 percent to $59.66.
Beijing’s door opens for discussions
China’s Commerce Ministry said on Friday that Beijing is “evaluating” a proposal from the U.S. to hold talks aimed at addressing President Donald Trump’s sweeping tariffs, signalling a possible easing of the trade tensions that have impacted markets globally.
The United States has approached China to seek talks over Trump’s 145 percent tariffs, and Beijing’s door was open for discussions, the commerce ministry said. The statement added that the U.S. should be prepared to take action in “correcting erroneous practices” and cancel unilateral tariffs, adding that Washington needed to show “sincerity” in negotiations.
Trump said on Wednesday he believed there was a “very good chance” his administration could do a deal with China.
Trade deal prospects ease demand concerns
In the U.S., the world’s largest oil consumer, the economy contracted for the first time in three years in the first quarter of fiscal 2025 as businesses rushed to import goods ahead of Trump’s expected tariffs. This decline has triggered demand concerns, further impacting oil prices in the previous session. However, hopes for a trade deal with China boosted sentiment, lifting oil prices today.
In recent weeks, oil prices witnessed severe declines as concerns that the trade war could push the global economy into a recession and impact oil demand rose. Markets were further hit by expectations that the OPEC+ group is preparing to raise output further.
However, oil prices were underpinned by a threat from Trump to impose secondary sanctions on buyers of Iranian oil. Trump’s comments followed a postponement of U.S. talks with Iran over its nuclear program, which came after the U.S. restored a “maximum pressure” campaign against Iran. This included efforts to drive the country’s oil exports to zero to help prevent Tehran from developing a nuclear weapon.
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Supply concerns persist as OPEC+ plans output increase
Following their decline in early trading, oil prices gained close to 2 percent late in Thursday’s session on Trump’s remarks, erasing some of the losses recorded earlier in the week on expectations of more OPEC+ supply coming to the market.
Saudi Arabia is telling allies and industry experts that it is unwilling to prop up the oil market with supply cuts and can manage a prolonged period of low prices, sources told Reuters on Wednesday. Several OPEC+Â members will also suggest the group accelerate output hikes in June for a second consecutive month, three people familiar with OPEC+ talks have said.
With non-OPEC+ supply rising robustly and global demand growth facing structural decline amid slower economic growth forecasts, oil prices will likely remain subdued.
