Oil prices retreat ahead of high-stakes US-China talks amid tariff reduction talks and geopolitical tensions in the Middle East.
West Texas Intermediate crude fell to $96.80 per barrel in Asian trading, extending a two-day decline as investors awaited a critical meeting between US President Donald Trump and Chinese President Xi Jinping. The summit, the first state visit by a US leader to China in nine years, has sparked caution amid reports of potential tariff reductions on $30 billion in goods.
The decline follows warnings from the International Energy Agency of a global oil undersupply until October, even if Middle East conflicts ease. The US Energy Information Administration reported a 6 million barrel-per-day drop in flows through the Strait of Hormuz in Q1, adding to supply concerns.
Geopolitical risks persist, with Washington tightening sanctions on Iranian oil sales to China and targeting banks facilitating transactions. Market focus remains on the Trump-Xi talks and their potential impact on trade tensions.