Oil prices surged on Monday, reaching $65.99 per barrel, after the United States and China agreed to temporarily ease tariffs, fueling optimism that the trade dispute between the world’s top two crude consumers may be nearing resolution.

According to Reuters, Brent crude futures rose by $2.08, or 3.25%, to $65.99 a barrel. Similarly, US West Texas Intermediate (WTI) crude futures increased by $2.05, or 3.36%, to $63.07.

The rally came after both nations announced a 90-day pause on further tariff actions following negotiations in Geneva over the weekend. As part of the agreement, tariffs will be reduced by over 100 percentage points, returning to a baseline rate of 10%.

Prior to this development, crude prices had fallen to $60, creating fiscal pressure for oil-dependent nations. Market analysts suggest that a reduction in trade tensions between the two economic powerhouses could stabilize global demand and support oil prices.

Ole Hansen, a market analyst at Saxo Bank, noted that easing trade frictions would reduce the risk of a prolonged economic downturn, which has weighed heavily on the oil market.

The Geneva discussions marked the first high-level, in-person meeting between US and Chinese economic officials since President Donald Trump resumed office and reinstated aggressive trade measures.

Improved dialogue between the two nations could restore trade flows and bolster global oil demand. “This is a positive step, and certainly better than a breakdown in talks,” said Callum Macpherson, head of commodities at Investec. “It’s no surprise that oil markets are reacting positively.”

Last week, both crude benchmarks recorded gains of over 4%, buoyed by a US trade agreement with the UK that further boosted investor sentiment and eased concerns about widespread economic fallout from American tariff policies.

Earlier in April, the US-China trade war had dragged oil prices to their lowest levels in four years.