Oil prices moved modestly higher on Tuesday, supported by stronger-than-anticipated economic data from China, although advances were restrained as markets remained cautious following renewed trade tariff threats from the Trump administration toward several European countries linked to the Greenland dispute.
At 08:05 ET (13:05 GMT), Brent crude futures for March delivery were up 0.8% at $64.41 a barrel, while U.S. West Texas Intermediate crude also rose 0.8% to $59.83 a barrel, after markets were closed on Monday.
China recovery offers support
China’s economy expanded slightly more than expected in the final quarter of 2025, according to data released Monday, as government stimulus and improving consumption helped activity meet Beijing’s annual growth target.
Gross domestic product rose 1.2% quarter-on-quarter in the three months to December, beating forecasts of 1.1%. That lifted full-year GDP growth to 5%, matching the government’s target for 2025, which was set at 5% for a third consecutive year amid a subdued post-pandemic recovery and heightened trade tensions with the U.S.
Official data also showed that China’s refinery throughput climbed 4.1% year on year in 2025, while crude oil production increased 1.5%, with both reaching record highs. As the world’s largest crude importer, signs of firmer Chinese economic momentum are seen as a potential positive for an oil market grappling with oversupply concerns.
Greenland-linked tariff threats unsettle sentiment
Oil markets were volatile on Monday after U.S. President Donald Trump threatened to impose tariffs on several major European economies until an agreement is reached to transfer Greenland to U.S. control.
Trump floated the possibility of duties of up to 25% on countries including France, Denmark and the U.K., and did not rule out the use of military force in relation to Greenland. He has repeatedly argued that U.S. ownership of the territory is vital for national security. Recent U.S. actions in Venezuela have also left investors wary of further military escalation.
IEA report and U.S. inventories awaited
Beyond geopolitics, attention this week is focused on the International Energy Agency’s monthly report, due on Wednesday. The update is expected to provide further insight into supply dynamics, after the IEA has repeatedly warned of a potential surplus emerging in 2026, and is also likely to include projections for 2027.
The IEA’s assessment follows a recent report from the Organization of Petroleum Exporting Countries, which struck a more optimistic tone on oil demand for 2026 and 2027.
Markets are also watching for upcoming U.S. oil inventory data, which could offer additional signals on supply and demand trends in the world’s largest oil producer.