Oil Rises as US–China Tariff Truce Extension Lifts Trade Optimism

PUKMEDIA

Oil prices.

Oil prices rose on Tuesday, 12 August 2025, after the United States and China agreed to extend a pause on higher tariffs, easing concerns that a further escalation of their trade dispute could harm their economies and reduce fuel demand in the world’s two largest oil consumers.

According to Reuters, Brent crude futures rose by 27 cents, or 0.4%, to $66.90 per barrel by 05:40 GMT, while US West Texas Intermediate crude futures gained 24 cents, or 0.4%, to $64.20.

U.S. President Donald Trump extended the tariff truce with China by a further 90 days, a White House official confirmed on Monday, averting the imposition of triple-digit duties on Chinese imports as American retailers prepared for the crucial end-of-year shopping season.

The move has raised hopes that the two largest economies could reach a formal agreement and avoid a near-total trade embargo. Analysts warn that tariffs risk slowing global growth, which in turn could weaken fuel demand and exert downward pressure on oil prices.

Oil prices have also been buoyed by fresh signs of weakness in the U.S. labour market, fuelling expectations of a Federal Reserve interest rate cut in September, noted Priyanka Sachdeva, Senior Market Analyst at brokerage Phillip Nova.

Later in the day, markets will be watching U.S. inflation figures, which could influence the Fed’s interest rate trajectory. Lower interest rates typically stimulate economic activity and support oil demand.

Potentially weighing on sentiment, President Trump and Russian President Vladimir Putin are scheduled to meet in Alaska on Friday to discuss prospects for ending the war in Ukraine.



PUKMEDIA