Synopsis
Oil prices rose slightly as investors awaited talks between U.S. President Trump and Chinese President Xi Jinping, focused on economic gains and geopolitical issues like the war in Iran. Despite concerns over rising interest rates, crude futures saw slight gains, with analysts warning of a potential rise in prices if the Strait of Hormuz remains closed.
ETMarkets.comOil prices saw an uptick as global markets await crucial negotiations between US President Trump and China’s Xi Jinping. Oil price rose slightly on Thursday as investors entered a wait-and-see mode ahead of talks between U.S. President Donald Trump and Chinese President Xi Jinping later in the day.
Trump arrived in Beijing on Wednesday evening and is expected to hold a series of meetings with Xi as he seeks to secure economic gains and address key geopolitical issues, including Iran was and the Strait of Hormuz.
Crude oil prices on May 14
Brent crude futures rose 13 cents, or 0.12%, to $105.76 a barrel, while U.S. West Texas Intermediate futures gained 12 cents, or 0.12%, to $101.14 a barrel. Both benchmarks had stabilized lower on Wednesday on concerns that further rises in US interest rates would weigh on demand. Brent lost more than $2 per barrel, while WTI lost more than $1.
Although Trump has said he does not believe China’s support is necessary to end the conflict with Iran, he should nonetheless seek Xi’s help in resolving the costly and politically unpopular war.
China remains the largest buyer of Iranian crude despite sanctions and pressure from the Trump administration. More than 80% of Iran’s oil shipments in 2025 were destined for China, with independent Chinese refiners continuing to buy sanctioned crude at a discount.
Morgan Stanley analysts said that global oil market is now engaged in “a race against time”, warning that the factors limiting a stronger rise in crude prices could weaken if the Strait of Hormuz remains closed until June.
Despite disruptions affecting nearly a billion barrels of oil supplies, crude prices remain below the highs reached in 2022 after Russia’s invasion of Ukraine. Analysts led by Martijn Rats said the market entered the current crisis with stronger supply reserves, while investors continue to believe the strait will eventually reopen.
Morgan Stanley added that rising U.S. crude exports and falling Chinese imports have so far helped protect the market from a more serious supply shock. However, the brokerage warned that a prolonged shutdown of Hormuz could once again reduce global supply if disruptions continue beyond what China or the United States can comfortably handle.
Haitong Futures said markets remained cautious and warned the ceasefire may only be temporary. The brokerage added that the impasse in negotiations between Washington and Tehran could trigger a new escalation, sending oil prices even higher.
Saudi Aramco CEO Amin Nasser said Monday that disruptions to shipments through Hormuz could delay the return to stability of oil markets until 2027, potentially affecting about 100 million barrels of oil supplies each week.
Nuvama Institutional Equities said a prolonged closure of the Strait of Hormuz could disrupt nearly 20 million barrels per day of global crude flows. In such a scenario, the brokerage estimates that oil prices could rise to between $110 and $150 per barrel.
(Disclaimer: The recommendations, suggestions, views and opinions expressed by the experts are their own. These do not represent the views of The Economic Times.)
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