Oil Market Falls Amid Doubt in US-China Trade Talks

The US and China are due to meet in Switzerland, which could be the first step toward resolving a trade war disrupting the global economy.

The trade talks between the world’s two largest economies come after weeks of escalating tensions.

President Donald Trump had protested China’s unfair advantage in global trade and slammed tariffs on imports, which has led to reciprocity from the Asian country.

Now, duties on goods imports between the countries have soared well beyond 100 per cent.

Meanwhile, market analysts have said that unless the US receives major trade concessions, further de-escalation seems unlikely, with US Treasury Secretary Scott Bessent describing the talks as “the opposite of advanced.”

In other related matters, US Vice President JD Vance described talks the US and Iran as “so far, so good” adding that there was a deal to be made that would reintegrate Iran into the global economy while preventing it from getting a nuclear weapon.

Previously, the US had threatened secondary sanctions on Iran after a fourth round of talks were postponed between both countries. This could threaten production of more than 3 million barrels per day, or about 3 per cent of global output.

This deal, if reached, could see the US lift the sanctions on Iranian oil, which right now is under maximum pressure.

The US Federal Reserve held interest rates steady but said the risks of higher inflation and unemployment had risen.

This development further economic outlook as the US central bank grapples with the impact of President Trump’s tariff policies.

US crude inventories fell by 2 million barrels to 438.4 million barrels in the week, the Energy Information Administration (EIA) said.

Also, rising conflict in the Middle East between Israel and the Houthis could increase the geopolitical risk premium, making prices go up.