WASHINGTON (dpa-AFX) - Extending gains from yesterday's session, crude oil prices have catapulted on Friday after the U.S.-China summit ended with no announcement on the likelihood of China liaising with Iran to end the gulf war, leaving the Strait of Hormuz blockade to continue.
WTI Crude Oil for June month delivery was last seen trading up by $4.18 (or 4.13%) at $105.35 per barrel.
The much-awaited U.S.-Iran summit concluded in China. U.S. President Donald Trump is returning to the U.S. after an extensive meeting with Chinese President Xi Jinping over two days.
Without elaborating much, Trump stated that the U.S. has made 'fantastic trade deals' beneficial for both the nations.
Earlier this week, before setting off to China, Trump stated that the U.S. can end the gulf war either through diplomacy or 'otherwise.' raising renewed war concerns.
However, since China is a close ally of Iran and a major purchaser of nearly 90% of Iranian oil exports, market participants counted on the possibility of Chinese intervention or mediation to bring the hostilities between the U.S. and Iran to an end.
During this visit, Trump stated that Xi agreed with him that Iran should not have a nuclear weapon and that the Strait of Hormuz must be free for all countries to transit.
In an interview with Fox News, Trump also stated that he was running out of patience and urged Iran to reach a deal as early as possible.
Since no big announcement with regard to Iran came out after the summit, concerns of war-threat renewed, sending crude oil prices higher.
Further, aboard Air Force One, Trump stated to reporters that the U.S. offered the 'ceasefire' proposal 'as a favor to Pakistan' though he was not in favor of it.
Addressing a press conference after a meeting of Foreign Ministers of BRICS nations in India, Iran's Foreign Minister Abbas Araghchi stated that there is no military solution for issues involving Iran.
Araghchi stressed that all vessels can pass through the Strait of Hormuz if they coordinate with Iranian authorities.
Soon after the war broke out, Iran effectively shut the strait, and a few weeks later, the U.S. Navy enforced a blockade on all ships transiting to and from Iranian ports.
The consequent rise in oil prices due to supply disruption, turned lower whenever positive indication on U.S.-Iran peace talks surfaced but otherwise has been surging steadily, thrusting intense inflationary pressure on all major economies.
Energy experts are warning of oil 'demand destruction', and consequent stagflation. Already, major agencies have downwardly revised their demand forecast due to the ongoing gulf crisis.
On Wednesday, the Organization of Petroleum Exporting Countries brought down its forecast on global oil-demand growth from 1.38 million barrels per day to 1.17 million bpd. However, for 2027, the alliance has predicted a rise in oil demand to 1.54 million bpd, up 200,000 bpd from the previous forecast.
Of note, earlier this month, OPEC+ cartel agreed to increase oil output by 188,000 bpd for June.
The same day, the Paris-based International Energy Agency had projected in its latest monthly oil market report that global oil supply will fall by 3.9 million bpd in 2026 to 10.22 million bpd even if the oil trade resumes gradually from June. The IEA predicted a drop by 420,000 bpd to 104 million bpd, down 1.3 million bpd from previous projections.
The U.S. dollar index was last seen trading at 99.22, up by 0.27 points (or 0.27%) today.
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