The global energy and economic landscape is undergoing a rapid transformation, and markets are reacting to a convergence of unexpected developments. In China, electric heavy-duty trucks are accelerating in popularity, surprising even bullish forecasts. Buoyed by state subsidies and fast-expanding charging infrastructure, electric truck sales surged 175% year-on-year in H1 2025, making up nearly a quarter of all new truck purchases. The bulk of this growth is driven by short-haul models operating in industrial hubs like ports and steel mills, slashing diesel use in the world’s largest oil importer and prompting analysts to revise Chinese oil demand forecasts downward.
This structural shift in China is happening just as U.S. President Donald Trump reignites global trade tensions. His latest moves include a steep 25% tariff on Japanese exports, igniting frustration in Tokyo amid unresolved trade talks. Japan’s economic uncertainty is compounded by a drop in real wages and weakening inflation pressures, complicating the Bank of Japan’s path toward policy normalization ahead of their July 20 upper house elections.
Oil markets, caught between evolving demand dynamics and geopolitical flashpoints, remain volatile. Crude futures recovered modestly after Thursday’s sell-off, with Brent trading at $68.83 and WTI at $66.81 per barrel. Gains were limited by rising OPEC+ output and concerns over Trump’s erratic tariff strategy. However, a surprise announcement that Trump will make a “major” statement on Russia fueled speculation of new sanctions on Moscow an oil heavyweight and lifted prices slightly. Unlock your trading potential with expert-led courses from MJFXM – your trusted partner in financial markets.
Meanwhile, OPEC slashed its 2026–2029 global demand forecasts, citing reduced Chinese consumption. Yet short-term fundamentals appear tight. Saudi Arabia is reportedly shipping 51 million barrels to China next month, the most since early 2023, while Red Sea shipping threats and summer demand add bullish pressure.
On the monetary front, the U.S. dollar has surged near two-week highs, driven by diminished Fed rate cut expectations and stronger-than-expected labor data. Comments from key Fed officials reflect a nuanced stance: while rate cuts are on the table, they’re not guaranteed. Markets remain sensitive to inflation data due next week, especially with the USD/JPY pair gaining on both economic divergence and yen weakness tied to Japan’s political turbulence.
All told, from electrified trucks in Asia to tariff-fueled market jitters in the West, the global economy is pivoting in real time. Investors are recalibrating strategies as old assumptions particularly around oil demand and trade stability get swiftly rewritten.