Oil Prices Edge Higher Amid OPEC+ Talks and Tariff Uncertainty

Oil prices saw a slight uptick early Thursday following a nearly 2% drop in the previous session, as markets react to potential OPEC+ output hikes, U.S.-China tariff discussions, and renewed U.S.-Iran nuclear negotiations.

Brent crude rose 6 cents to $66.18 per barrel, while U.S. West Texas Intermediate (WTI) climbed 7 cents to $62.34. The prior session's decline was triggered by a Reuters report suggesting some OPEC+ members may push for faster production increases in June, despite ongoing disputes over quota compliance.

Investor sentiment remains mixed amid contradictory signals from Washington regarding tariffs on Chinese imports. While The Wall Street Journal noted that the White House might lower tariffs to 50% to revive trade talks, Treasury Secretary Scott Bessent stated current tariffs of 145% on Chinese goods and 125% on U.S. exports are unsustainable. However, Press Secretary Karoline Leavitt clarified that no unilateral tariff cuts are planned.

A prolonged trade standoff could dampen oil demand, with Rystad Energy forecasting China's oil demand growth could be halved to 90,000 barrels per day in 2025 if tensions persist. Meanwhile, reports from the Financial Times suggest that former President Trump may consider tariff exemptions on Chinese auto parts, which could influence trade dynamics further.

In the Middle East, U.S.-Iran nuclear talks are entering a third round this weekend. Analysts are watching for any sign of sanctions relief that could lead to increased Iranian oil exports. However, fresh U.S. sanctions imposed Tuesday on Iran’s energy sector have cast doubt over diplomatic progress, with Tehran calling the move a sign of "lack of goodwill."

With geopolitical tensions and energy diplomacy in flux, oil markets remain on edge as global supply and demand forecasts shift.