Oil prices climbed roughly 2% after U.S. President Donald Trump said Chinese President Xi Jinping agreed that Iran should not be allowed to obtain nuclear weapons, while traders continued monitoring risks surrounding shipping activity near the Strait of Hormuz.
Brent crude futures rose $1.77, or 1.67%, to $107.49 a barrel by 0642 GMT after touching an intraday peak of $107.99 earlier in the session.
U.S. West Texas Intermediate crude futures advanced $2.13, or 2.11%, to $103.30 a barrel.
For the week, Brent has gained close to 6%, while WTI has climbed more than 7%, supported by uncertainty surrounding the unstable ceasefire tied to the Iran conflict.
Trump and Xi Discuss Iran and Hormuz
Trump said he was running out of patience with Iran and added that both he and Xi agreed Tehran must not acquire nuclear weapons and should reopen the Strait of Hormuz.
Xi did not publicly discuss his talks with Trump concerning Iran, though China’s foreign ministry later released a statement.
“This conflict, which should never have happened, has no reason to continue,” the ministry said.
“With the Beijing summit not delivering any breakthrough on Iran, market focus is back on the deadlock and a blockaded Strait, with a tail risk of renewed military escalation,” said Vandana Hari, founder of Vanda Insights.
Shipping Risks Keep Markets on Edge
Trump also said China was interested in purchasing oil from the United States, one of several developments markets had been watching for from the summit.
Shipping risks around Hormuz continued to draw attention after reports that Iranian personnel seized a vessel near the United Arab Emirates on Thursday and redirected it toward Iranian waters. Separately, an Indian cargo ship carrying livestock from Africa to the UAE sank Wednesday off Oman’s coast.
According to the White House, Trump and Xi both agreed on the need to keep the shipping route operational.
Iran’s Revolutionary Guards stated that 30 ships had crossed the Strait of Hormuz since Wednesday evening. Although that remained far below the roughly 140 vessels that typically used the route daily before the conflict, it would still mark a notable increase if verified.
Supply Constraints Continue Supporting Crude Prices
Yang An of Haitong Futures said tight supply conditions remained the dominant force supporting oil prices.
“Oil prices swung several times yesterday but still closed near the day’s high,” he said.
“Ships passing through the strait eased some market concerns, but not enough to change the strong trend driven by tight supply.”
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