Oil Gains Ground With Trade War and China’s Outlook to the Fore

(Bloomberg) -- Oil climbed after a volatile week as traders parsed the latest signals in the trade war, including China’s efforts to support its tariff-hit economy, and weighed geopolitical developments in Iran.

Brent rose above $67 a barrel after dipping 1.6% last week, while West Texas Intermediate was near $63. Treasury Secretary Scott Bessent told ABC News that talks were ongoing with US trading partners, and “some of those are moving along very well, especially with the Asian countries.”

In China — the top crude importer — officials reiterated plans to strengthen support for employment and growth. Authorities are “fully confident” in reaching the expansion target of about 5% in 2025, Zhao Chenxin, vice chairman of the National Development and Reform Commission, told a briefing.

Brent crude is headed for the biggest monthly loss since 2022 after touching a four-year low. Futures have been burdened by concerns that the US-led trade war will stifle economic activity and hurt energy demand. At the same time, the OPEC+ cartel has compounded bearish sentiment by ramping up idled production. The group will meet on May 5 to discuss output plans for June.

“Market players will remain on the lookout for a thaw in the US-China trade war as an opportunity to buy,” said Vandana Hari, founder of Vanda Insights in Singapore. “The OPEC+ meeting is not until next Monday but a potential extension of their accelerated supply boost into June is casting a bearish shadow on the market.”

On the geopolitical front, the US and Iran reported signs of progress in talks on a deal over Tehran’s nuclear program, and the two sides agreed to meet again in Europe. Separately, an explosion at the nation’s Shahid Rajaee port on Saturday left dozens dead. The major hub has a strategic location on the Strait of Hormuz, a key conduit for the global oil trade.

Elsewhere at the weekend, Ukrainian President Volodymyr Zelenskiy held a one-on-one meeting with Donald Trump. Afterward, the US president said his Russian counterpart, Vladimir Putin, may be stalling to avoid ending the war and suggested further sanctions might be needed. 

Underlying metrics point to a mixed outlook over time. In April, Brent’s prompt spread — the difference between its two nearest contracts — has widened in a bullish, backwardated structure to the largest since January, signaling tight near-term supply. Still, differentials further along the curve, especially between the early months of 2026, are much less positive.

Investors will also get a chance this week to hear views on the global crude market outlook from oil’s supermajors, with a slew of companies due to report quarterly figures. Among those scheduled are BP Plc, Shell Plc, Chevron Corp. and Exxon Mobil Corp.

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