Brent crude oil price for July delivery increases 1.64%, settling at $64.96.
The Brent crude oil, a key European benchmark, recently closed a session on the Intercontinental Exchange at 1.05 dollars above the previous closing price of 63.91. This shift occurred amidst the US and China announcing a deal to slim down tariffs on each other's imports by 115 percentage points.
Previously, the US imposed a 40% tariff, whereas China levied a whopping 25% tariff. However, after the agreement, the US will now impose a 30% tariff, and China will stick to a 10% tariff. These changes are scheduled to persist for a span of 90 days, during which bilateral negotiations will continue.
This agreement seems to have minimized investors' worries about the economic repercussions of the ongoing trade dispute between these two global powers, which in turn, had previously driven the Brent to experience a substantial 15% decline in April – its sharpest monthly drop since November 2021.
Elsewhere, geopolitical events may further influence oil prices. For instance, there are rumors of a potential face-to-face meeting between Ukrainian President Volodymyr Zelenski and Russian President Vladimir Putin in Turkey, potentially even involving former US President Donald Trump. If an accord was reached, this could notably lessen the sanctions imposed on the Russian Federation, consequently augmenting Russia's production capacity as one of the world's leading oil producers.
Furthermore, negotiations between the US and Iran over the Iranian nuclear program could result in the easement of sanctions and a subsequent surge in oil production. While the exact implications of these geopolitical developments on Brent crude prices are not entirely clear-cut, analysts agree that ongoing trade disputes and geopolitical tensions contribute to the fluctuating energy market.
Interestingly, this tariff reduction, along with the rumblings of international political shifts, have spurred a surge in oil prices. As the world's largest crude oil importer, China’s probable increased demand and the overall positive sentiment among investors have pushed Brent crude prices to a two-week high of $65.26 per barrel. However, long-term optimism may be tempered by broader US policies concerning China, such as restrictive technology practices and investment scrutiny.
The reduction in tariffs between the US and China, a significant development in the international industry, has led to increased optimism in the finance sector, driving Brent crude prices to a two-week high. Simultaneously, potential political shifts impacting China and Russia could further influence energy market dynamics by affecting the production and demand of crude oil.
