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Oil prices inched higher in Asian trading on Monday after U.S. President Donald Trump extended the deadline for his proposed 50% tariffs on the European Union, offering some relief to global markets amid ongoing trade tensions. However, concerns about oversupply—driven by the prospect of OPEC+ raising production—kept gains in check.
As of 21:18 ET (01:18 GMT), Brent Oil Futures expiring in July rose 0.2% to $64.93 per barrel, while West Texas Intermediate (WTI) crude futures gained 0.3% to $61.69 per barrel.
Trump Extends EU Tariff Deadline, Easing Immediate Trade Tensions
Trump’s announcement on Sunday that he will delay the 50% tariffs on EU imports from June 1 to July 9 was welcomed by markets. The decision followed a call with European Commission President Ursula von der Leyen, in which both leaders agreed to intensify trade talks in the coming weeks.
This extension temporarily alleviates concerns over a potential escalation in the U.S.-EU trade dispute, offering a window for diplomatic efforts to cool tensions and stabilize global economic prospects. A more stable trade environment supports forecasts for energy demand, lending some strength to oil prices.
OPEC+ Meeting Looms, Potential Output Hike in Focus
Despite the trade relief, oil markets remain cautious ahead of the OPEC+ meeting on June 1, where members are expected to discuss a possible output hike. According to Bloomberg News, the group is considering a supply increase of 411,000 barrels per day in July, although no final agreement has been reached.
OPEC+ has already begun unwinding production cuts, adding supply to the market in May and June. Any additional increase would likely reinforce oversupply concerns, especially as global demand faces uncertainties from trade tensions and slowing economic activity in key markets.
U.S.-Iran Nuclear Talks: A Wild Card for Supply
Meanwhile, the outcome of U.S.-Iran nuclear talks remains a key factor for oil markets. Trump said over the weekend that he had “very good” discussions with Iranian officials during the fifth round of negotiations, raising the possibility of progress in easing sanctions on Iran.
If an agreement is reached, Iran could ramp up its crude exports, adding further pressure to the global supply-demand balance and potentially capping oil prices in the near term.
Outlook: Trade and Supply Dynamics in Focus
Oil markets are poised for a volatile stretch as traders monitor the evolving U.S.-EU trade situation, the upcoming OPEC+ meeting, and developments in U.S.-Iran relations. While Trump’s tariff delay offers short-term relief, the looming July 9 deadline and the prospect of higher OPEC+ output remain significant headwinds.
For now, oil prices appear supported by the easing of immediate trade tensions but are vulnerable to fresh supply-side pressures if OPEC+ opts for another production hike.
