Oil surges on Trump's China deal signals amid Strait of Hormuz tensions

Crude oil climbed more than a percent on Friday morning as President Trump signaled that China was interested in purchasing American oil, a development that briefly overshadowed the ongoing volatility in Middle Eastern shipping lanes. Brent crude futures rose $1.17 to close at $106.89 a barrel, while West Texas Intermediate gained $1.10 to reach $102.27—modest but meaningful moves in a market already priced for disruption.

The price movement came as Trump, in an interview with Fox News, made clear his impatience with Iran and suggested that Beijing was taking a pragmatic view of its relationship with Tehran. The White House confirmed that Trump and Chinese President Xi Jinping had discussed the importance of keeping the Strait of Hormuz open to shipping, a waterway through which roughly a fifth of the world's traded oil passes. The two leaders were scheduled to meet later that day to conclude a state visit that had included a series of business announcements.

Yet the optimism was tempered by the reality on the water. On Thursday, Iranian personnel seized a ship off the coast of the United Arab Emirates and directed it toward Iranian territorial waters. A day earlier, an Indian cargo vessel carrying livestock from Africa to the UAE had been sunk in waters near Oman. These incidents underscored the genuine hazards facing commercial shipping in the region, even as some traffic resumed.

Iran's Revolutionary Guards reported that thirty vessels had transited the Strait of Hormuz since Wednesday evening—a notable increase from the near-total paralysis of recent days, but still a fraction of the roughly 140 ships that typically moved through the waterway each day before the current tensions escalated. The discrepancy between current traffic and historical norms illustrated how far the shipping environment remained from normal, despite the modest uptick.

Yang An, an analyst at Haitong Futures, argued that the underlying driver of oil prices remained the fundamental tightness of global supply rather than any single geopolitical event. He noted that crude had swung several times during the previous trading session but had closed near its highs, suggesting that the market's conviction about supply constraints was holding firm even as headlines shifted. The passage of ships through the strait had eased some anxiety among traders, he said, but not enough to alter the broader upward pressure on prices.

U.S. Trade Representative Jamieson Greer reinforced this reading in an interview with Bloomberg, saying that China was approaching its relationship with Iran with pragmatism and that Beijing viewed an open Strait of Hormuz as essential to its own interests. The alignment of American and Chinese positions on this point—keeping one of the world's most critical shipping channels functioning—suggested a rare convergence of interests between the two powers, at least on this particular issue. Whether that convergence would hold, and what it might mean for broader energy markets and geopolitical stability, remained to be seen as Trump and Xi prepared to meet.