Oil prices surge as Trump-Xi talks coincide with Strait of Hormuz tensions

Oil prices climbed over 1 percent on Friday as US President Donald Trump and China's President Xi Jinping prepared to conclude a two-day state visit. The visit featured ceremonial events and business agreements but did not yield a breakthrough on Iran. Market concerns remained high due to ongoing ship attacks and seizures in the Strait of Hormuz, despite Iran's claims that about 30 vessels had passed through the waterway.

Key Highlights

• Oil prices rose over 1 percent as Trump and Xi concluded a two-day state visit
• Brent crude reached $107.04 per barrel and WTI climbed to $102.50 per barrel
• Incidents in the Strait of Hormuz and ongoing tensions kept market concerns elevated
• Iran reported 30 vessels crossing the Strait since Wednesday, below pre-war averages

Oil Prices and Market Reactions

Brent crude futures rose $1.32, or 1.25 percent, to $107.04 a barrel by 04:25 GMT. US West Texas Intermediate (WTI) futures increased by $1.33, or 1.31 percent, reaching $102.50 per barrel. For the week, Brent crude gained nearly 6 percent, while WTI jumped more than 7 percent. These increases reflect uncertainty over the fragile ceasefire and ongoing tensions in the region.

President Trump stated in a Fox News interview on Thursday night, "I am not going to be much more patient. They should make a deal." His comments followed recent incidents in the Strait of Hormuz, including the seizure of a ship by Iranian personnel off the United Arab Emirates and the sinking of an Indian cargo vessel carrying livestock from Africa to the UAE in waters off Oman.

Diplomatic Developments and Shipping Concerns

US Trade Representative Jamieson Greer said on Friday that China was taking a pragmatic approach to its involvement with Iran. He emphasized the importance of keeping the Strait of Hormuz open for China. The White House confirmed that Trump and Xi had agreed on the need to maintain open shipping lanes in the region.

Vandana Hari, founder of Vanda Insights, noted that the Beijing summit did not deliver any breakthrough on Iran. She said, "Market focus is back on the deadlock and a blockaded strait, with a tail risk of renewed military escalation." Among the deals discussed at the summit, Trump mentioned that China expressed interest in buying oil from the United States.

Iran's Revolutionary Guards reported that 30 vessels had crossed the Strait of Hormuz since Wednesday evening. This number remains below the pre-war daily average of 140 but represents a substantial increase if confirmed. Yang An, an analyst at Haitong Futures, said, "Ships passing through the strait eased some market concerns, but not enough to change the strong trend driven by tight supply." Oil prices fluctuated during the day but closed near their highs.

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CarBike 360 Says

As geopolitical tensions tighten their grip on global markets, the outcome of the Trump-Xi meeting could play a pivotal role in shaping short-term oil price trends. With the Strait of Hormuz remaining a critical chokepoint, any escalation may further disrupt supply expectations, keeping traders cautious and volatility high in the coming weeks.