Oil Prices Steady as US-China Trade Talks and Russia Sanctions Balance Demand Concerns
Oil prices held steady on Monday as optimism over a potential U.S.-China trade deal framework and renewed U.S. sanctions on Russia helped counter broader concerns about slowing global oil demand.
At 11:30 a.m. ET (15:38 GMT), Brent crude futures were up 14 cents (0.2%) at $66.08 per barrel, while U.S. West Texas Intermediate (WTI) rose 22 cents (0.4%) to $61.74. Both benchmarks had fallen nearly 1% earlier in the session.
Trade Talks Lift Sentiment
U.S. Treasury Secretary Scott Bessent said on Sunday that officials from Washington and Beijing had reached a “substantial framework” for a trade deal. The agreement could avert 100% tariffs on Chinese imports and suspend China’s rare-earth export restrictions, boosting market confidence ahead of President Trump’s meeting with President Xi later this week.
The news supported global equity markets, while gold, bonds, and oil pulled back slightly after last week’s rally.
“Crude futures are pausing after last week’s sharp rally as trade negotiations progress,” said Dennis Kissler, Senior Vice President of Trading at BOK Financial.
Kissler added that new U.S. sanctions targeting major Russian oil firms could tighten global supply if enforced, providing further support for crude prices.
“Traders are still cautious about how much these sanctions and trade developments will actually affect global oil supply,” he said.
Demand Outlook Still a Concern
Despite recent gains, oil demand concerns continue to weigh on sentiment. Brent crude recently touched its lowest level since May, pressured by weak consumption data. However, stronger U.S. fuel demand and renewed sanctions on Russia have provided some price stability.
“The key for oil bulls is continued strength in U.S. consumption,” said Chris Beauchamp, Chief Market Analyst at IG Bank. “Without that, the downward drift could accelerate.”
OPEC Output and Supply Updates
In Iraq, the OPEC group’s top overproducer, officials are negotiating production quotas within its 5.5 million barrels per day capacity, according to Oil Minister Hayan Abdel-Ghani. He added that Sunday’s fire at the Zubair oilfield did not affect exports.
OPEC and its allies have shifted strategy this year, reversing previous production cuts to regain market share — a move that has kept prices from rising further.
Last week, Brent and WTI gained 8.9% and 7.7%, respectively, following fresh U.S. and EU sanctions on Russia.
“There are still challenges for Russian oil entering the market, depending on how sanctions are enforced,” said Janiv Shah, analyst at Rystad Energy.
