Global oil prices experienced a notable increase on Tuesday, driven by unexpectedly strong economic growth figures from China and a weakening U.S. dollar. Brent crude futures rose by 19 cents, or 0.3%, reaching US$64.13 per barrel in early trading. The U.S. West Texas Intermediate (WTI) February contract gained 25 cents, or 0.4%, to settle at US$59.69, while the more actively traded March contract edged up by 0.08 cents, or 0.13%, to US$59.42. Trading volumes for WTI were impacted by the Martin Luther King Jr. Day holiday in the United States, resulting in no settlements on Monday.
Analysts attribute the upward momentum to China’s better-than-expected fourth quarter GDP data for 2025, which signaled continued resilience in the world’s largest oil-importing nation. Tony Sycamore, a market analyst at IG, commented that China’s economic performance provided significant support to oil demand sentiment globally. China reported a robust 5.0% economic growth rate for the previous year, successfully meeting its official targets despite ongoing challenges in domestic consumption. Additionally, China’s refinery throughput in 2025 increased by 4.1% year-on-year and crude oil output grew by 1.5%, both setting new records for the country.
Geopolitical Tensions and Tariff Threats Fuel Market Uncertainty
Beyond economic data, markets were influenced by renewed geopolitical tensions stemming from U.S. President Donald Trump’s latest threats regarding tariffs on European countries over his proposal to purchase Greenland. Over the weekend, Trump announced a potential imposition of 10% tariffs beginning February 1 on imports from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland, and Britain. If negotiations over Greenland do not result in a deal by June 1, these tariffs could escalate to 25%. This development has injected further uncertainty into global trade relations and commodity markets.
The tariff threats have also had a direct impact on currency markets, with the dollar index (.DXY) falling by 0.3% against a basket of major currencies. A weaker dollar generally supports oil prices as it makes dollar-denominated commodities more affordable for international buyers using other currencies. Tony Sycamore noted that this recent dollar softness—largely attributed to market reactions to Trump’s ongoing tariff rhetoric—has provided additional support for crude prices.
Shifts in Global Oil Trade: Venezuela and Russia Adjust Strategies
Market participants are closely monitoring developments in Venezuela’s oil sector following President Trump’s announcement that the United States would assume management of the country’s industry after President Nicolas Maduro was captured. Trade sources revealed that energy trading firm Vitol has offered Venezuelan crude to Chinese buyers at discounts of approximately US$5 per barrel relative to ICE Brent prices for April delivery.
In parallel, China has significantly increased its imports of Russian Urals crude since 2023, reaching record volumes at prices lower than those for Iranian oil. This shift comes as India has sharply reduced its imports of Russian crude due to Western sanctions and ahead of an impending European Union ban on Russian oil products.
Demand Optimism Amid Complex Global Dynamics
The convergence of strong Chinese economic growth, fluctuations in currency markets, and escalating geopolitical tensions has created a complex environment for global oil prices. While China’s robust performance continues to underpin demand optimism among market participants, ongoing uncertainties—including potential tariff escalations and shifting trade flows—are expected to influence price movements in the coming months.
Experts suggest that market sentiment will remain sensitive to further developments in U.S.-European trade relations as well as adjustments in global oil supply routes prompted by political changes in Venezuela and Russia. As these factors evolve, stakeholders across the energy sector will be watching closely for signals that could impact both short-term pricing and long-term strategic decisions.
