The global oil market is a delicate dance, and tensions between superpowers can send shockwaves. A potential trade war looms as the US and China's relationship frays.
On October 13, oil prices rebounded after a sharp decline, with Brent crude futures rising 1.47% to $63.65 per barrel and US West Texas Intermediate crude climbing 1.51% to $59.79. This recovery followed a turbulent week where former President Trump announced a 100% tariff on China's exports to the US, effective November 1, citing China's rare earth export controls.
But here's the twist: Trump's tariff threat may be more bark than bite. Analysts attribute the oil market's bounce to traders betting on a potential deal, as Trump and VP JD Vance hinted at using tariffs as a negotiation tactic. This strategy, dubbed the 'TACO' trade, suggests Trump might back down, a controversial assumption given his past actions.
The US-China trade dispute has been a rollercoaster. Oil prices plummeted in March and April when tensions peaked, but China's September crude imports rose 3.9% annually, reaching 11.5 million barrels per day. This increase is attributed to high refinery utilization rates and stockpiling.
Meanwhile, Trump declared an end to the Gaza war, heading to Israel for the release of hostages and prisoners as part of a fragile ceasefire.
As the world watches, will the Trump-Xi meeting defuse or ignite the trade tensions? And what does this mean for oil prices and global economic stability? The coming days will be crucial, and the impact on energy markets is a story that demands our attention.
