Oil prices edged lower in Asian markets early Monday as traders processed conflicting messages from the United States on trade tariffs targeting China. Brent crude futures for June delivery slipped 0.3% to $64.56 per barrel, while West Texas Intermediate (WTI) dropped 0.3% to $60.75.
These moves come just days after oil touched four-year lows, weighed down by expectations of weakening demand and a murky global economic outlook. The ongoing trade conflict between Washington and Beijing is a key driver of volatility. China, the world’s largest crude importer, faces increasing economic pressure as new U.S. tariff measures threaten to further dent industrial output and energy consumption.
U.S.-China Trade Tensions Complicate Outlook
Over the weekend, markets received a mixed message from the White House. President Trump’s administration temporarily exempted electronics from a steep 145% tariff, a move that slightly eased investor concerns. However, Trump made it clear that:
- The exemption is temporary
- Electronics are still subject to a universal 10% duty
- An additional 20% tariff on Chinese electronics linked to fentanyl remains active
In retaliation, China imposed a 125% tariff on American imports, marking a fresh escalation in the trade standoff. With both sides digging in, the risk of further economic slowdowns in China is now front and center for oil markets.
Sluggish industrial demand has already dented Chinese oil imports, with year-over-year figures showing steady declines. Continued trade friction could exacerbate the trend, further depressing global energy prices.
U.S. Policy Focuses on Lower Oil Prices
U.S. Energy Secretary Chris Wright weighed in on the energy outlook, stating that oil prices are expected to trend lower under President Trump’s leadership. The administration has made it a priority to reduce energy costs as part of its broader anti-inflation strategy.
Key developments include:
- Trump urging OPEC and Saudi Arabia to increase oil production
- Partial compliance from oil-producing nations
- Plans to expand domestic energy production over the long term
However, analysts caution that expanding U.S. supply will take significant time and capital investment, meaning it won’t ease short-term market tightness.
All eyes now turn to this week’s OPEC monthly report, which could offer further insight into global supply trends and future price action.
