Oil surges on Trump's Iran ultimatum amid Strait of Hormuz tensions

Oil markets moved sharply higher on Friday morning as President Trump signaled his patience with Iran was wearing thin, and as fresh incidents in the Strait of Hormuz kept traders on edge. Brent crude climbed $1.32 to $107.04 a barrel—a gain of 1.25%—while West Texas Intermediate rose $1.33 to $102.50, a jump of 1.31%. For the week, the moves were steeper: Brent had climbed nearly 6%, WTI more than 7%, all of it driven by the fragile state of a ceasefire in the Iran conflict and the persistent threat to one of the world's most critical shipping lanes.

Trump's words, delivered in a Fox News interview Thursday night, were direct. "I am not going to be much more patient," he said. "They should make a deal." The comment landed as Trump prepared for a state visit meeting with China's President Xi Jinping in Beijing on Friday, a two-day summit that had included ceremonial events and business announcements. U.S. Trade Representative Jamieson Greer told Bloomberg that morning that China was taking a pragmatic view of its relationship with Iran, and that keeping the Strait of Hormuz open mattered deeply to Beijing's interests. Yet the summit itself had not produced a breakthrough on the Iran question, leaving markets to focus on what analysts called a deadlock and the tail risk of renewed military escalation.

The Strait of Hormuz, a narrow waterway between Iran and Oman through which roughly one-fifth of the world's oil passes, had become a flashpoint. On Thursday, Iranian personnel seized a ship off the United Arab Emirates and steered it toward Iranian waters. A day earlier, an Indian cargo vessel carrying livestock from Africa to the UAE had been sunk in waters off Oman's coast. These incidents, though not unprecedented in recent weeks, reinforced the market's anxiety about supply disruption. Iran's Revolutionary Guards claimed that 30 vessels had crossed the Strait since Wednesday evening—a number that, if accurate, represented a meaningful increase but still fell far short of the roughly 140 ships that typically transited daily before the conflict began.

Vandana Hari, founder of the oil analysis firm Vanda Insights, captured the market's predicament: with no diplomatic breakthrough emerging from Beijing, traders were back to wrestling with the possibility of a blockaded strait and the risk that military tensions could flare again. The White House said Trump and Xi had at least agreed on the importance of keeping the shipping lane open, a statement that acknowledged the stakes without resolving them.

Yet not all market movement reflected pure geopolitical alarm. Yang An, an analyst at Haitong Futures, argued that the underlying driver of oil prices remained tight global supply. Oil had swung several times during the previous trading session but still closed near its highs, he noted. The passage of even a modest number of ships through the Strait had eased some concerns, but not enough to shift the fundamental dynamic. "Ships passing through the strait eased some market concerns, but not enough to change the strong trend driven by tight supply," An said. The question now was whether Trump's hardening stance would translate into action, and whether any action would ease or inflame the situation in the Gulf.