US Reaches Tariff Deal with Japan, Stabilizing Crude Oil Prices

Crude oil prices have stabilized following the US reaching a tariff deal with Japan. The agreement is expected to boost demand for crude oil, which has been impacted by a decline in production and rising supply. The deal also has implications for the global economy, as the US is the world's largest oil consumer. The stabilization of crude oil prices is expected to have a positive impact on the energy sector.

Crude oil prices have stabilized following the United States' tariff deal with Japan, which is expected to boost demand for crude oil. The agreement, struck on July 23, 2025, includes a 15% tariff on U.S. imports from Japan, along with $550 billion in Japanese investments in the U.S. [2]

The deal is significant for the global energy sector as the U.S. is the world's largest oil consumer. The stabilization of crude oil prices is expected to have a positive impact on the energy sector, which has been affected by a decline in production and rising supply. [1]

The U.S.-Japan trade deal has put the brakes on oil's three-day slide, with both Brent crude and U.S. West Texas Intermediate futures down by 2 cents each as of 0654 GMT on July 23. [1] The agreement has improved global trade sentiment, potentially leading to increased demand for crude oil.

Industry experts are cautiously optimistic about the impact of the trade deal on oil prices. Vandana Hari, founder of oil market analysis provider Vanda Insights, stated, "The slide (in prices) of the past three sessions appears to have abated but I don’t expect much of an upward impetus from news of the U.S.-Japan trade deal as the hurdles and delays being reported in talks with the EU and China will remain a drag on sentiment." [1]

The stabilization of crude oil prices comes amid ongoing trade tensions between the EU and China, which are expected to test the bloc's unity and resolve. The EU-China summit on Thursday will address these tensions, but the outcome is uncertain. [1]

Separately, U.S. crude and gasoline stocks fell last week, while distillate stocks rose by 3.48 million barrels. This increase in distillate stocks may offer some relief to the middle distillate market, which has been looking increasingly tight. [1]

In another bullish sign for the crude market, the U.S. energy secretary announced that the U.S. would consider sanctioning Russian oil to end the war in Ukraine. [1] The EU has also agreed to its 18th sanctions package against Russia, lowering the price cap for Russian crude. However, analysts have noted that a lack of U.S. participation could hinder the effectiveness of the package. [1]

The market reaction to the U.S.-Japan trade deal has been positive, with Japanese automaker shares leading the Nikkei share average higher. Toyota Motor Corp's shares jumped by 15%, and Honda Motor Co saw an increase of more than 11%. The benchmark 10-year Japanese bond futures tumbled as much as 0.92 yen to 137.68 yen. [2]

The stabilization of crude oil prices and the expected boost in demand due to the U.S.-Japan trade deal are likely to have a positive impact on the energy sector. However, the outcome of the EU-China summit and ongoing trade tensions could still pose challenges to the global energy market.

References:
[1] https://www.reuters.com/business/energy/oil-prices-stabilise-after-us-japan-trade-deal-2025-07-23/
[2] https://finance.yahoo.com/news/factbox-key-facts-us-japan-013846476.html