Oil Advances With Focus on US-China Trade Talks After UK Deal

Fri, May 9, 2025

Oil rose as the market turned its attention to trade talks between the US and China this weekend, after President Donald Trump announced an agreement with the UK.

Brent surpassed $64 a barrel, dipping briefly from session highs after President Trump posted on social media that an 80% tariff on China “seems right”. His administration is weighing a reduction of levies on China to de-escalate tensions and temper the economic pain both countries are already starting to feel.

Crude has tumbled from a mid-January peak on concerns the trade war will dent economic growth, while OPEC+ moved to revive idled production. Measured optimism on the negotiations has helped prices recover some ground after starting the week near their lowest since 2021. There have also been positive signs in fuel markets — one gauge of strength in gasoline is the strongest in about six months.

“There is renewed trade optimism across financial markets, including oil, following yesterday’s signing of the first UK–US trade agreement,” said Arne Lohmann Rasmussen, chief analyst at A/S Global Risk Management. “There is strong support for oil prices in the $60–$64 range.”

Still, while the US president hailed the pact with the UK as historic, specifics of the deal indicated it fell short of the “full and comprehensive” agreement he had promised. And even though Trump said negotiations with China would result in tangible progress, Beijing reiterated on Thursday its call for the US to cancel tariffs ahead of talks.

The US, meanwhile, sanctioned a third so-called teapot refinery in China — along with port terminal operators, vessels and individuals — for allegedly facilitating the trade of Iranian crude. Hebei Xinhai Chemical Group was the main target of the action.

The UK also sanctioned senior executives in an oil trading network that it says has been helping key Russian oil exports flowing. The country also plans to target more than 100 oil tankers.