Oil prices saw a significant increase on Monday, driven by heightened tensions between the United States and China. The renewed strain followed President Donald Trump’s announcement of possible 100% tariffs on Chinese goods and restrictions on the export of critical software, set to begin November 1. In response, China expanded its own controls on rare earth exports and imposed further limitations on processing technologies, including bans on cooperation with foreign companies without government approval.
Brent crude climbed to $63.41 per barrel in early trading, marking a 2.1% rise from its previous close of $62.08. Similarly, the US benchmark West Texas Intermediate (WTI) increased by 2.3%, reaching $59.41 from $58.07 in the prior session. These gains came after China asserted that it was “not afraid of” a trade war with the United States, maintaining its stance that while it does not seek conflict, it is prepared to face one if necessary.
Despite strong rhetoric from both sides, President Trump later sought to ease market anxieties by expressing optimism about future relations with China. On his social media platform Truth Social, he reassured followers not to worry about China and described Chinese President Xi Jinping’s recent export restrictions as a temporary setback. Trump stated, “Highly respected President Xi just had a bad moment. He doesn’t want depression for his country, and neither do I.”
The escalating trade dispute between the world’s two largest oil consumers unsettled financial markets late last week. US stocks experienced sharp declines as investors reacted to fears of prolonged trade hostilities and potential disruptions to global supply chains. Analysts noted that uncertainty over the dispute’s outcome could have wide-reaching effects on global economic growth, with particular concern for industries reliant on stable energy prices and consistent access to critical materials.
Nevertheless, some market participants drew hope from reports that Presidents Trump and Xi might meet at the Asia-Pacific Economic Cooperation summit in South Korea later this month. Such a meeting could provide an opportunity for dialogue and de-escalation, helping to restore investor confidence in both oil markets and broader economic prospects.
In addition to trade tensions, events in the Middle East also influenced oil prices. Over the weekend, President Trump announced that the war in Gaza had ended as he left for the region to attend a peace summit focused on a newly agreed cease-fire. The truce between Israel and Hamas helped calm fears of supply disruptions in the oil-rich region.
On Monday, the Al-Qassam Brigades—the armed wing of Palestinian resistance group Hamas—declared their intention to release 20 Israeli hostages alive as part of a cease-fire and prisoner exchange agreement with Israel. The announcement signaled further progress toward stability in an area critical to global oil supplies.
With tensions easing in the Middle East, analysts suggested that oil prices received additional support from hopes for lasting peace and more predictable supply conditions moving forward.
