Crude prices slipped on Tuesday, reversing earlier gains, as investors grew increasingly uneasy over intensifying trade frictions between the U.S. and China — a development that could dampen global energy demand.
Brent crude futures declined 28 cents, or 0.4%, to $63.04 a barrel by 06:30 GMT, while U.S. West Texas Intermediate fell 23 cents, or 0.4%, to $59.26. Both benchmarks had finished higher in the previous session, with Brent up 0.9% and WTI rising 1%.
“While working-level talks between two sides continue, the Chinese side has vowed a ’fight to the end’, if there’s a fight. Oil markets will be sensitive to such rhetoric emanating from either camp, though we expect the price movements to remain rather rangebound in the near term,” said Suvro Sarkar, energy sector team lead at DBS Bank.
U.S. Treasury Secretary Scott Bessent said Monday that President Donald Trump still plans to meet Chinese President Xi Jinping in South Korea later this month, as the two countries work to ease tensions surrounding tariffs and export controls.
The market’s cautious tone follows recent developments, including Beijing’s expanded rare earth export restrictions and Trump’s threats of 100% tariffs and new software export curbs starting November 1.
Further escalating the situation, Beijing announced on Tuesday sanctions targeting five U.S.-linked subsidiaries of South Korean shipbuilder Hanwha Ocean Co., Ltd.. Meanwhile, both countries are preparing to impose new port fees on shipping companies handling goods ranging from holiday merchandise to crude oil.
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