Oil prices advanced around 2% after U.S. President Donald Trump said he and Chinese President Xi Jinping agreed that Iran must not obtain nuclear weapons, while market concerns persisted over attacks and seizures involving ships near the Strait of Hormuz despite Tehran reporting increased maritime traffic through the waterway.
Brent crude futures gained $1.77, or 1.67%, to $107.49 a barrel by 0642 GMT after earlier reaching an intraday high of $107.99.
U.S. West Texas Intermediate crude futures climbed $2.13, or 2.11%, to $103.30 a barrel.
For the week, Brent crude has risen almost 6%, while WTI has advanced more than 7%, supported by continued uncertainty surrounding the fragile ceasefire linked to the Iran conflict.
Trump Signals Harder Line on Iran
Trump said his patience with Iran was running out and stated that he and Xi had agreed during talks that Tehran must not be allowed to develop nuclear weapons and should reopen the Strait of Hormuz.
Xi did not publicly comment on discussions with Trump concerning Iran, although China’s foreign ministry later issued 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 oil market analysis firm Vanda Insights.
Markets Watch for Energy and Trade Signals
Among the potential outcomes investors had hoped for from the summit, Trump said China expressed interest in purchasing oil from the United States.
Concerns around shipping activity in the Strait of Hormuz also remained elevated. A vessel was reportedly seized by Iranian personnel near the United Arab Emirates on Thursday and directed toward Iranian waters. Separately, an Indian cargo ship transporting livestock from Africa to the UAE sank on Wednesday off the coast of Oman.
The White House said Trump and Xi had agreed on the importance of keeping the strategic shipping route open.
Iran’s Revolutionary Guards stated that 30 vessels had crossed the Strait of Hormuz since Wednesday evening. While this figure remained well below the roughly 140 ships that typically passed through daily before the conflict, it would still represent a significant increase if confirmed.
Tight Supply Continues to Support Oil
Yang An, analyst at Haitong Futures, said supply conditions remained the primary factor driving oil prices higher.
“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.”