Oil prices jumped 3% on Tuesday after the U.S. and China agreed to a 90-day pause on new tariffs, easing fears of another front in the global trade war and improving the outlook for economic growth—and by extension, oil demand.
Brent crude was last trading at $66.79, up $1.83 (+2.82%) in afternoon trade, while WTI climbed to $63.85, a gain of $1.90 (+3.07%). The rally marks a strong reversal from earlier this month, when prices slumped on supply pressure and weak macro sentiment.
The tariff reprieve gives both sides room to de-escalate, but analysts warn that the core issues—especially U.S. demands on Chinese industrial overcapacity and fentanyl enforcement—remain unresolved. Still, the pause was enough to juice market optimism, particularly after weeks of limp trading.
With refining capacity still constrained in both the U.S. and Europe, product cracks are holding firm despite OPEC+ production ticking up by 411,000 bpd in May.
The rally also reflects growing bets that summer demand—especially for gasoline and jet fuel—will hold up better than expected. That, combined with geopolitical friction and seasonal maintenance, is keeping traders on edge.
With both momentum and fundamental support building, bulls may try to push prices toward April highs. But if China talks stall—or supply outpaces refining capacity—this bounce could be short-lived.
For now, though, crude is climbing—and the tariff truce is giving the market just enough hope to run with.
By Julianne Geiger for Oilprice.com
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