Oil prices rose slightly on Monday after Chinese data showed a sharp rebound in crude imports in March, although fears that the escalating trade war between the United States and China would weaken global economic growth and weigh on fuel demand have weighed on the market.
Brent crude futures were up 6 cents, or 0.09%, at $64.82 a barrel at 06:32 GMT. U.S. West Texas Intermediate crude futures were trading at $61.59 a barrel, up 9 cents, or 0.15%.
China’s crude oil imports in March rebounded sharply from the previous two months, rising about 5 percent from a year earlier, data showed on Monday, supported by a rise in Iranian oil and a rebound in Russian oil shipments.
However, Brent and WTI have lost around $10 a barrel since the start of the month, and analysts revised their oil price forecasts downwards as the trade war between the world’s two largest economies intensifies. Goldman Sachs expects Brent to average $63, WTI $59 for the remainder of 2025. Brent to average $58 and WTI to average $55 in 2026.
The bank expects global oil demand in the fourth quarter of 2025 to rise by just 300,000 barrels per day year-on-year, “given the weak growth outlook,” analysts led by Dan Stroeven said in a note. Adding that the slowdown in demand is expected to be the sharpest for petrochemical raw materials.
BMI, a subsidiary of Fitch Solutions, cut its forecast for the price of Brent crude to US$68 from US$76 per barrel for 2025. As it expects slowing economic activity to erode demand.
Escalating trade tensions push oil to more volatility
Beijing raised tariffs on U.S. imports to 125 percent on Friday in response to President Donald Trump’s decision to raise tariffs on Chinese goods, intensifying a trade war that threatens to destabilize global supply chains.
Trump on Saturday granted exemptions from hefty tariffs on smartphones, computers and some other electronics heavily imported from China, but said on Sunday he would announce the rate of tariffs on imported semiconductors over the next week.
The trade war has exacerbated fears that unsold exports may continue to push down domestic Chinese prices. “China’s inflation data has been a window into an economy unprepared for a trade war. Consumer prices fell for the second consecutive month year-on-year, while producer prices recorded a 30% decline respectively,” Moody’s Analytics reported in a weekly note, referring to data released on April 10.
As companies braced for a potential drop in demand, U.S. energy companies last week cut the number of oil rigs by the most in a week since June 2023, bringing the total number of oil and natural gas rigs down for the third week in a row, according to Baker Hughes.
U.S. Energy Secretary Chris Wright said on Friday that the U.S. may halt Iran’s oil exports as part of Trump’s plan to pressure Tehran over its nuclear program.
Officials said over the weekend that the two countries held “positive” and “constructive” talks in Amman on Saturday and agreed to resume dialogue next week aimed at addressing Tehran’s escalating nuclear program.
Analysts at ING, led by Warren Patterson. Said in a note: “This may help remove some of the sanctions risks affecting the oil market, especially if the talks continue to move in the right direction.”
Crude under pressure amid trade uncertainties and Iran talks
The oil market was calm in early morning trading today, after stabilizing lower for the second consecutive week last week. Initially, news of the Trump administration offering tariff exemptions on some electronic products backed up dangerous assets. Since then, uncertainty has returned. With President Trump indicating that the waivers are only temporary, and that other, more specific tariffs may be imposed in due course.
Meanwhile, market participants are absorbing the fallout from the indirect talks over the weekend between the United States and Iran. Officials described the talks as constructive and plan to hold further discussions. This could remove some of the sanctions risks affecting the oil market. Especially if the talks continue in the right direction.
Not surprisingly, the latest positioning data shows that speculators significantly reduced net long positions in Brent crude (ICE) during the last reporting week. Speculators sold 162,344 lots, bringing their net long positions to 155,838 lots as of Tuesday. This is primarily due to the liquidation of long positions. The market also saw the entry of a few new short short positions.
This represents the largest volume of speculative sell-off in a single week since at least 2015. And by a wide margin. The move highlights the magnitude of the negative shift in market sentiment and how disappointed speculators are ahead of Trump’s tariff announcement on April 2.
A weak oil market already seems to be causing a decline in drilling activity in the United States. The latest data from Baker Hughes (NASDAQ: BKR) shows that the number of oil rigs in the United States fell by 9 rigs last week. Reaching 480. This represents the biggest weekly decline since June 2023. Current WTI prices provide little incentive for U.S. drilling producers.
