Morning Highlights: Oil Slips as U.S.-China Truce and Fed Cut Stir Mixed Market Signals

Thursday, October 30, 2025

Oil prices edged lower as traders weighed a tariff truce between the United States and China against fresh signs of policy easing from the Federal Reserve and continued uncertainty over Russian sanctions. The combination of macro optimism and lingering oversupply concerns kept markets cautious ahead of next week’s OPEC+ meeting.

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Market Snapshot

• Brent crude futures down 32 cents to $64.60/bbl at 6:15 EST; WTI down 30 cents to $60.18.

• Prices softened after Wednesday’s rebound as traders viewed the U.S.–China tariff deal as de-escalation rather than resolution.

• Both benchmarks remain on track for a third straight monthly decline amid persistent oversupply fears.

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U.S.-China Trade Truce

• Presidents Trump and Xi reached a one-year agreement in Busan, under which Washington will reduce tariffs to 47% from 57% in exchange for renewed Chinese soybean imports, continued rare earth exports, and action against illicit fentanyl trade.

• Markets saw the move as a pause in tensions, not a structural reset, with risk appetite improving only modestly.

• The limited deal helps reduce short-term pressure on global growth expectations but leaves deeper trade and technology disputes unresolved.

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Monetary Policy and Macro Outlook

• The Federal Reserve cut interest rates as expected, citing the government shutdown’s impact on data visibility but signaling this may be its last cut of the year.

• Analysts said the move supports commodities tied to economic activity, with Rystad Energy noting it reflects a “broader turn toward reflation and support.”

• Rate cuts and improving trade sentiment offered a modest cushion for energy demand expectations despite broader headwinds.

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OPEC+ and Supply Outlook

• The producer alliance is expected to announce another 137,000 bpd output increase at its November 2 meeting.

• The market remains focused on whether the group will temper production growth if prices stay near three-month lows.

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Russia Sanctions and Asset Realignment

• Lukoil accepted an offer from Gunvor to buy its foreign assets, marking the first major restructuring move by a sanctioned Russian oil major.

• The sale includes Lukoil International GmbH, which oversees assets spanning Iraq, Bulgaria, and Romania, pending U.S. Treasury approval.

• The Treasury has issued a license allowing firms until Nov. 21 to wind down dealings with Lukoil and Rosneft, with extensions possible.

• Gunvor, which profited heavily from post-2022 market volatility, has been expanding into refineries, terminals, and renewable assets.

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India’s Energy Shift

• Indian Oil Corp (IOC) plans to buy up to 24 million barrels from the Americas in early 2026 to offset lost Russian supply following new U.S. sanctions.

• IOC has already purchased 2 million barrels of West African crude and issued a call for offers from U.S., Canadian, and Latin American suppliers.

• Sanctions are pushing India’s import costs higher, as discounted Russian barrels fade and refiners turn to costlier alternatives.

• India’s share of Russian imports slipped from 36% to 34% this fiscal year, while refinery run rates fell to a 19-month low in September.

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