Oil Steadies After 2% Slide Amid OPEC+ Disagreements and U.S.-China Trade Uncertainty

Oil prices stabilized on Thursday after falling nearly 2% in the previous session, as investors balanced the prospect of accelerated OPEC+ output increases against mixed signals on U.S.-China trade talks and ongoing U.S.-Iran nuclear negotiations.

Brent crude futures inched up 8 cents, or 0.12%, to $66.20 a barrel by 0505 GMT, while U.S. West Texas Intermediate (WTI) crude gained 9 cents, or 0.14%, to $62.36 a barrel.

Prices fell sharply on Wednesday following a Reuters report that several OPEC+ members plan to propose advancing output increases for a second consecutive month at the group’s June meeting. The report cited three sources familiar with the talks.

“While a risk-on mood buoyed most assets yesterday, oil was left behind due to growing signs of discord within OPEC+,” analysts at ING wrote in a note.

Kazakhstan, which contributes roughly 2% of global oil output and has consistently exceeded its production quota over the past year, said it would prioritize national interests over OPEC+ commitments in determining its production levels. The country’s stance adds to longstanding tensions within the group, reminiscent of the 2023 rift that led to Angola’s departure from OPEC+.

“Further disagreements among OPEC+ members represent a clear downside risk, potentially triggering a price war,” ING added.

Meanwhile, optimism over a possible thaw in U.S.-China trade tensions lent some support to oil prices. The Wall Street Journal reported that the White House may consider reducing tariffs on Chinese imports by up to 50% as a concession to jump-start negotiations.

U.S. Treasury Secretary Scott Bessent acknowledged that current tariffs—145% on Chinese goods entering the U.S. and 125% on U.S. goods entering China—are unsustainable and would need to be lowered to facilitate dialogue. However, White House Press Secretary Karoline Leavitt later clarified on Fox News that there would be no unilateral tariff cuts on Chinese goods.

Analysts at Rystad Energy warned that a prolonged trade conflict could halve China’s oil demand growth this year, reducing it from 180,000 barrels per day (bpd) to just 90,000 bpd.

Adding to the market’s caution, the U.S. and Iran are scheduled to begin a third round of nuclear talks this weekend. A potential agreement could lead to the lifting of sanctions on Iranian oil, increasing global supply and weighing on prices. However, fresh U.S. sanctions imposed on Iran’s energy sector this week cast doubt on the likelihood of a near-term breakthrough. Iran’s foreign ministry denounced the sanctions as evidence of Washington’s “lack of goodwill and seriousness” in pursuing diplomacy.

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