Published by Global Banking & Finance Review®
Posted on April 9, 2025
3 min readLast updated: January 24, 2026
Add as preferred source on GoogleOil prices jumped over 4% after Trump paused tariffs on many countries but increased China's levy, affecting global trade and market dynamics.
By Nicole Jao
NEW YORK (Reuters) - Oil prices climbed more than 4% on Wednesday, bouncing back from four-year lows earlier in the session, after U.S. President Donald Trump said he would further increase tariffs on China but pause the tariffs he announced last week for most other countries.
Trump authorized a 90-day pause and raised the tariff rate for China to 125%, effective immediately. The previously announced 104% tariff on China kicked in earlier on Wednesday.
Brent futures settled up $2.66, or 4.23%, to $65.48 a barrel. U.S. West Texas Intermediate crude futures closed $2.77, or 4.65%, higher at $62.35.
Both contracts had lost about 7% earlier in the session before the reversal.
"We've reached a turning point in the trade conflict with Trump giving the countries that have shown desire to work on a deal to get rid of tariffs some time to work it out," said Phil Flynn, senior analyst with Price Futures Group.
"What Trump is doing is putting China out on an economic island all by themselves," Flynn said.
China announced additional tariffs on U.S. goods, imposing an 84% tariff on U.S. goods from Thursday.
"I think the market expects a China deal to come down the pipe," said Bob Yawger, director of energy futures at Mizuho. "We seem to be making inroads into some countries that the Chinese were hoping to lean on."
However, the escalating trade war between China and the U.S. continued to pressure oil prices, analysts said.
The trade conflict is stoking fears of a global recession, said UBS analyst Giovanni Staunovo. "While oil demand has likely not suffered yet, rising concerns of weaker oil demand over the coming months require lower prices to trigger supply adjustments to prevent an oversupplied market," Staunovo added.
Countermeasures in Canada, a major U.S. trading partner, also took effect on Wednesday.
Countries in the European Union agreed on Wednesday to impose 25% tariffs on a range of U.S. imports in a first round of countermeasures.
A decision last week by the OPEC+ group of producers to raise output in May by 411,000 barrels per day, which analysts say is likely to push the market into surplus, limited oil's gains.
In the U.S., crude inventories rose by 2.6 million barrels to 442.3 million barrels last week, the Energy Information Administration said, compared with analysts' expectations in a Reuters poll for a 1.4-million-barrel rise.
"Exports are on the lower level and we will have to see if we are going to lose access to the China market, and whether we will see a diminished export situation going forward," said John Kilduff, partner with Again Capital in New York.
The operator of the Keystone oil pipeline system in Canada and the United States issued a force majeure notice on Wednesday after a leak in North Dakota, according to media reports.
The pipeline was shut on Tuesday after an oil spill near Fort Ransom, North Dakota.
(Reporting by Nicole Jao in New York, Siyi Liu in Singapore, Colleen Howe in Beijing, Arunima Kumar in Bengaluru, Enes Tunagur in London. Editing by David Goodman, Mark Potter, Ros Russell, Cynthia Osterman and Rod Nickel)
The article discusses the surge in oil prices following Trump's decision to pause tariffs on many countries while increasing China's levy.
Oil prices rose over 4% as the market reacted to the pause in tariffs for many countries and the increased levy on China.
OPEC+'s decision to raise output may push the market into surplus, potentially limiting oil price gains.
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