Oil Prices Surge As U.S–China Trade Talks Ignite 2025’s Hottest Trade

Brent Crude jumped above $ 64.30 a barrel, while WTI Crude Oil topped $61.10 a barrel – its highest level since October 2023 – as momentum builds behind what analysts at GSC Commodity Intelligence are “calling the most asymmetric and undervalued trade of the year”.

Trump Hints At “Very Substantive” Talks – Could This Be The Breakthrough?

Market sentiment soared after President Donald Trump announced a new round of “very substantive” trade negotiations with China, scheduled this weekend in Switzerland.

The discussions, led by Treasury Secretary Scott Bessent, come amid rising anticipation that a rollback of the crippling 145% tariffs on $1.2 trillion worth of Chinese goods could be imminent.

On Truth Social, Trump wrote: “80% Tariff on China seems right! Up to Scott B,” followed by: “CHINA SHOULD OPEN UP ITS MARKET TO USA — WOULD BE SO GOOD FOR THEM!!! CLOSED MARKETS DON’T WORK ANYMORE!!!” Goldman Sachs estimates that even a 50% tariff reduction could boost global GDP by 0.3 percentage points –with energy demand likely to surge as trade reaccelerates.

Game-Changer In Motion: A U.S-China Deal Could Unleash Oil’s Next Major Leg Higher

China, the world’s largest crude importer, brought in 11.5 million barrels per day (bpd) in Q1 2025 – already 4.7% higher year-on-year. Analysts at GSC Commodity Intelligence forecast that figure could climb above 13 million bpd if trade tensions ease and manufacturing picks up. Meanwhile, global inventories have declined by 6.2% since January, with OPEC+ maintaining disciplined output. This creates a fragile balance where even a modest demand shock could ignite a major price breakout.

GSC Commodity Intelligence believes the current environment is the most asymmetric setup in years. In a note to clients, analysts stated: “We’re looking at an asset that’s been mispriced for months. Recession fears dragged oil down, but the macro has flipped – and the market hasn’t caught up yet.” Adjusted for inflation and supply dynamics, crude is trading at a 30% discount to its five-year average.

China’s Exports Surprise To The Upside. Is The Global Engine Restarting?

Fresh economic data points to green shoots. China’s outbound shipments rose 8.1% year-over-year in April, even as exports to the U.S plunged by 21.7%. The divergence suggests a pivot to alternative markets and early signs of an industrial rebound that could fuel higher energy consumption across Asia’s manufacturing hubs.

JPMorgan recently upgraded Crude oil to its top “overweight” trade idea, forecasting WTI could reach $78 within 90 days if tariffs are eased.

Oil Is No Longer Just a Barometer – It’s 2025’s Biggest Trade

As the Geneva talks unfold between the world’s two largest economies, one thing is becoming increasingly clear: Oil is no longer just a reflection of macro sentiment – it’s fast becoming the biggest trading opportunity of 2025! Analysts at GSC Commodity Intelligence believe any meaningful breakthrough could reprice Crude $10–$15 higher in a matter of days. “This isn’t just a rally,” the firm wrote. “All the stars are aligning and Oil is back on everyone’s radar”.