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Oil prices surged sharply in Asian trading on Thursday, rebounding from multi-year lows as U.S. concessions on recent tariffs helped lift market sentiment. The recovery came as traders weighed increased U.S. tariff pressures on China, Canada, and Mexico against expectations of higher oil supplies following an OPEC+ agreement to boost production this week.
Brent oil futures for May delivery rose 0.5% to $69.66 per barrel, while West Texas Intermediate (WTI) crude futures increased 0.5% to $66.25 per barrel by 20:29 ET (01:29 GMT). Notably, Brent had hit its lowest level since December 2021, and WTI was trading near a one-year low, following data that showed a larger-than-expected build in U.S. oil inventories, raising concerns about cooling U.S. fuel demand.
Market relief came from reports that U.S. President Donald Trump was offering concessions to automakers regarding his recent 25% tariffs on imports from Mexico and Canada. Trump announced that automakers would receive a one-month adjustment period, and there were indications he might also consider exemptions for agricultural products such as potash and fertilizers. These measures have sparked hopes that the economic impact of the tariffs could be less severe than originally feared, with some traders betting that further tariff adjustments may be on the horizon.
Despite these concessions, Trump signaled that more tariffs—including reciprocal measures—will be imposed in early April, maintaining a degree of uncertainty in the market.
In related news, Mexican state oil company Pemex is reportedly in discussions with potential buyers in Asia and Europe, including China, as it adapts to the higher U.S. trade tariffs. Pemex, which exported more than half of its production to the U.S. in 2024, saw its exports fall sharply in January as supply chains began to shift in anticipation of the tariffs. The company has also ruled out the possibility of offering discounts to U.S. customers despite the trade pressures.
Overall, while the recent concessions have provided some short-term support to oil markets, concerns over escalating tariffs and shifting supply-demand dynamics continue to influence price volatility.
