Oil markets lifted by signs of trade truce

October 14, 2025 (MLN): Oil prices climbed on Tuesday amid renewed optimism over global demand, following early indications of easing trade tensions between the United States and China.

Brent crude futures went up by $0.63, or 0.99%, to $62.69 per barrel.

West Texas Intermediate (WTI) crude futures decreased by $0.62, or 1.04%, to $58.87 per barrel by [12:25 pm] PST.

Treasury Secretary Scott Bessent said on Monday that President Donald Trump remains determined to meet Chinese President Xi Jinping in South Korea later this month, as both nations work to de-escalate disputes involving tariffs and export restrictions.

Bessent noted that extensive discussions took place between U.S. and Chinese officials over the weekend, with additional meetings planned in the coming days.

In a note, analysts at Saxo Bank observed that President Donald Trump had moderated his rhetoric toward Beijing and appeared more receptive to striking a deal.

The possibility of improved ties between the world’s two largest economies has traditionally supported oil prices, with traders anticipating stronger global growth and higher fuel consumption.

Still, recent actions including China’s expanded export restrictions on rare earth materials and Trump’s threats to impose 100% tariffs and software export bans starting November 1 have tempered optimism.

Last week, crude prices recorded their sharpest weekly decline since May, with markets rattled by uncertainty surrounding a potential Trump Xi meeting.

The U.S. president recently downplayed the likelihood of such talks during the Asia-Pacific Economic Cooperation (APEC) summit in South Korea, saying on Truth Social there was “no reason” for the meeting to happen.

Even as Washington and Beijing adopt a more conciliatory tone, geopolitical risks remain a key driver for oil markets. “The industry continues to face significant geopolitical headwinds,” noted ANZ analyst Daniel Hynes, citing China’s decision to impose levies on U.S.-flagged vessels, including oil tankers a move that led to last minute shipment cancellations and a surge in freight costs.

Adding to the complex landscape, Trump on Monday revealed the official end of the two year Gaza conflict, which had disrupted stability across the Middle East.

Meanwhile, in its latest monthly report, the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, projected that the current supply deficit in global oil markets would narrow in 2026 as the OPEC+ alliance moves ahead with gradual production increases.

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