Oil prices rose on Tuesday as the United States and China extended their tariff freeze, easing concerns that their trade war escalation might disrupt their economies and negatively affect fuel demand in the world’s two largest oil consumers. Brent crude futures increased by 26 cents, or 0.39%, to $66.89 per barrel by 00:15 GMT, while US West Texas Intermediate crude rose 22 cents, or 0.34%, to $64.18. A White House official said on Monday that President Donald Trump extended the tariff truce with China for another 90 days, postponing dozens of tariffs on Chinese goods as US retailers prepare for the critical year-end holiday season. This raised hopes for a possible agreement between the two largest economies, potentially helping to overcome a near-total trade ban. Tariffs threaten to slow economic growth, which could weaken global fuel demand and lower oil prices.

Investors are also looking forward to a meeting between Trump and Russian President Vladimir Putin on August 15 in Alaska to negotiate an end to the war in Ukraine. This meeting comes amid increasing US pressure on Russia, threatening harsher sanctions on Russian oil buyers such as China and India if no peace agreement is reached, which could negatively affect oil trade flows. Daniel Hines, chief commodity strategist at ENZ Bank, wrote in a note: “Any peace agreement between Russia and Ukraine will end the risk of Russian oil disruption that has overshadowed the market.” Trump set a deadline last Friday for Russia to agree to peace in Ukraine or face secondary sanctions on its oil buyers while pressuring India to reduce its purchases of Russian oil. Washington also pressured Beijing to stop buying Russian oil, with Trump threatening secondary tariffs on China.

The risk of these sanctions diminished before the Trump-Putin meeting on August 15. US inflation data later today may indicate the Federal Reserve’s interest rate path, with any signal of rate cuts likely to support crude oil prices.