Oil prices climbed during Asian trade on Tuesday after the United States and China agreed to extend a pause on higher tariffs, tempering fears that an escalation in their trade dispute could undermine economic growth and weaken fuel demand in the world’s two largest oil consumers.
By 3:20 pm AEST (5:20 am GMT), Brent crude futures were up 29 cents, or 0.4%, at $66.92 per barrel, while U.S. West Texas Intermediate crude futures gained 25 cents, or 0.4%, to $64.22.
A White House official said on Monday that U.S. President Donald Trump had extended the tariff truce with China by 90 days, averting triple-digit duties on Chinese goods as American retailers prepare for the crucial end-of-year holiday season.
The move lifted hopes that the two economic powers could reach an agreement and avoid a near-total trade embargo.
Investors are also focused on a planned meeting between Trump and Russian President Vladimir Putin in Alaska on 15 August, aimed at negotiating an end to the war in Ukraine.
The talks come as Washington increases pressure on Moscow, including threats of harsher measures against Russian oil buyers such as China and India if no peace deal is struck.
"Any peace deal between Russia and Ukraine would end the risk of disruption to Russian oil that has been hovering over the market," analysts at ANZ noted.
Trump had given Russia a deadline of last Friday to agree to peace terms or face secondary sanctions on its oil buyers, while also urging India to scale back purchases of Russian crude.
Washington has pressed Beijing to halt Russian oil imports, warning of secondary tariffs. The likelihood of those sanctions being implemented has eased as the August meeting approaches.
Traders are also awaiting U.S. inflation figures due later in the day, which could influence the Federal Reserve’s interest rate outlook. Signs of a potential rate cut would be supportive for crude demand and prices.
