Oil experts hail US-China tariff truce, foresee boost in global demand

KUWAIT: Kuwaiti oil experts have welcomed the 90-day suspension of tariffs between the United States and China, describing the move as a step toward restoring global economic confidence and stabilizing oil markets. The temporary truce, they say, could lead to a recovery in global oil demand after months of volatility. Experts told KUNA that oil prices had declined sharply since the start of the trade dispute in April, as fears of a global economic slowdown weighed on market sentiment. However, the recent agreement has reversed that trend, pushing prices higher and easing investor concerns.

Oil expert Jamal Al-Gharabally said the suspension of tariffs was a “positive step” toward easing trade tensions that have cast a shadow over energy markets. He noted that OPEC projects oil demand could rise by one to two percent annually if trade relations between major economies stabilize. Energy analyst Dr Abdulsamee Behbehani pointed out that despite OPEC’s recent decision to increase production in May and June — a move typically associated with downward pressure on prices — the market reacted positively to the tariff agreement.

Ahmad Mulla Juma

Dr Abdulsamee Behbehani

Jamal Al-Gharabally

“The positive sentiment from the US-China deal outweighed the production increase,” he said, adding that oil prices climbed to $66 per barrel, the highest in two weeks. He also highlighted that Iran’s willingness to continue indirect negotiations with the US may exert further upward influence on prices in the near term. Analyst Ahmad Mulla Juma stressed that oil prices are closely linked to market sentiment.

“Optimism about economic recovery drives demand expectations higher, while negative outlooks result in price declines,” he said. Meanwhile, Chairman of the Kuwait Business Council in Dubai, Dr Firas Al-Salem, cautioned that despite the temporary relief, uncertainties remain in global economic policy. He predicted that oil prices will likely hover between $60 and $70 per barrel in the coming period, citing subdued demand prospects and ongoing pressure on petrochemical margins.

The US and China agreed to suspend tariffs imposed since April 2, forming a joint consultation committee to manage trade issues. As part of the agreement, tariffs on Chinese goods were reduced from 145 percent to 30 percent, with the remainder of duties postponed for 90 days. – KUNA