Oil Prices Rise Slightly as US-China Tariff Truce Extends and Trump-Putin Meeting Approaches
By early Tuesday, Brent crude oil futures had gained 26 cents, or 0.39%, reaching $66.89 per barrel. Meanwhile, US West Texas Intermediate (WTI) crude rose 22 cents, or 0.34%, to $64.18 per barrel.
The boost in oil prices comes after the White House announced that US President Donald Trump has extended the tariff truce with China by another 90 days. This move delays the imposition of higher tariffs on Chinese goods just as American retailers prepare for the important holiday shopping season.
This extension has raised hopes that the US and China—the world’s two biggest economies—might still reach a broader trade agreement. Avoiding heavy tariffs is seen as positive for global economic growth, which in turn supports oil demand. High tariffs could slow down the economy and reduce the need for fuel, putting downward pressure on prices.
Investors are also closely watching a planned meeting between President Trump and Russian President Vladimir Putin on August 15 in Alaska. The two leaders are expected to discuss ways to end the ongoing war in Ukraine.
This meeting comes amid increasing US pressure on Russia. Washington has warned of tougher sanctions against countries like China and India that continue to buy Russian oil if no peace deal is reached. Such sanctions could disrupt global oil trade.
“Any peace agreement between Russia and Ukraine would reduce the risk of supply disruptions from Russian oil,” said Daniel Hynes, a senior commodity strategist at ANZ, in a market note.
President Trump had set a deadline last Friday for Russia to agree to peace or else face sanctions on its oil buyers. He has also been urging India to cut back on Russian oil imports. Washington has pressed China to do the same, even threatening secondary tariffs.
However, the threat of these sanctions seems to have lessened for now, especially with the Trump-Putin meeting coming up.
Investors will also be paying attention to US inflation data expected later today. This data could provide clues about the Federal Reserve’s next moves on interest rates. If the Fed signals it might cut rates soon, that could further support oil prices.
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