Oil prices are slowly recovering from a steep dive triggered by U.S. President Donald Trump’s aggressive global tariff campaign. Brent crude, which had dipped dangerously close to the $60 mark earlier this month, rebounded to nearly $67 per barrel this week, giving oil-exporting countries hope amid persistent global trade tensions.
The brief rally was sparked by signs that the White House may offer limited exemptions on certain imports, like smartphones and semiconductors, from its latest tariff round. While that optimism buoyed market sentiment temporarily, renewed threats of broader trade investigations, including one into U.S. dependence on imported critical minerals, quickly tempered expectations.
Still, China’s unexpected crude oil import surge in March provided the much-needed support to oil prices. The country imported over 12 million barrels per day, marking a 20-month high. Analysts link this spike to recovering flows of Iranian and Russian crude, which had earlier stalled due to U.S. sanctions. Brent crude climbed to $66 per barrel, while West Texas Intermediate (WTI) rose above $61 per barrel.
Exporters Struggle Beneath the Surface
Despite the recovery, many oil-exporting nations remain under severe economic pressure. The uncertainty surrounding tariff policies and their effect on global oil demand continues to cast a long shadow. A Reuters report cited Angola, Colombia, Nigeria, and Venezuela as some of the countries likely to suffer the most if the tariff standoff drags on.
In Angola, the impact is already visible. The government was recently forced to pay $200 million to cover a margin call from JPMorgan on a $1 billion total return swap. Nigeria, on the other hand, remains exposed through its dependence on Treasury bills pegged to the naira, which is vulnerable to depreciation as global uncertainty roils currency markets.
Across the oil-producing world, the pain is real. Saudi Arabia’s budget deficit could balloon to $75 billion if current price levels persist, according to Goldman Sachs. And while the kingdom is far from insolvent, sustained low oil prices could disrupt its ambitious economic reform agenda. Goldman’s Middle East economist, Faruk Soussa, warned that fiscal deficits across the Gulf Cooperation Council (GCC) countries could swell significantly.
In Russia, Urals crude fell below $55 per barrel last week, well short of the $69.70 per barrel benchmark used in its 2025 budget. With 30% of its revenue tied to oil and gas, the Kremlin is already exploring long-term energy strategies that assume stagnating production over the next 25 years.
Winners and Losers: A Tale of Two Markets
While exporters feel the sting of subdued prices, importing countries could benefit—albeit temporarily. “The lower oil price outlook is positive for oil importers,” said Monica Malik, chief economist at Abu Dhabi Commercial Bank, “but it’s unlikely to counterbalance the significant headwinds from the trade war.”
J.P. Morgan raised the odds of a global recession to 60% earlier this month, up from 40%, as financial markets brace for protracted uncertainty. The IMF echoed these concerns, warning that continued trade friction could dampen global economic growth and push vulnerable economies into crisis.
Looking Ahead: Can Optimism Hold?
The big question now is whether the ongoing tariff war will find resolution in the coming weeks or continue to drag on for months or even years. A recent 90-day negotiation window, initiated by Trump to de-escalate tensions, helped calm the stock markets. If meaningful trade deals emerge during this period, oil markets could rally further.
Still, analysts caution that any recovery will come with a ceiling. Trump’s continued focus on strategic commodities and China may keep prices from soaring too high, effectively ensuring affordability for importers while offering minimal relief for struggling exporters.
For now, Brent’s slow climb to $67 offers a fragile lifeline, but oil-producing countries know all too well that the road to stability is long and riddled with policy landmines.
