Brent Set for Strong Weekly Gain

Brent crude futures hovered above $106 per barrel on Friday and were on track to rise roughly 5% for the week, as diplomatic attempts to end the US-Iran conflict continued to stall, leaving the strategically crucial Strait of Hormuz effectively closed. The key shipping route remains under a dual blockade that has emerged as a central obstacle in negotiations, with President Donald Trump saying the current ceasefire was on “massive life support” after dismissing Tehran’s latest response to his peace proposal. Meanwhile, the IEA reported that crude and fuel flows through the Strait of Hormuz dropped by around 4 million barrels per day in March and April, warning that the global oil market could stay materially undersupplied through October even if the conflict is resolved next month. Separately, President Trump held talks with Chinese President Xi Jinping, with both leaders discussing efforts to keep the strait open to safeguard energy trade and improve US oil exports to China.

Brent crude futures were little changed at around $105 per barrel on Thursday, as traders monitored developments in the Middle East and the summit between US President Trump and Chinese President Xi. Reports from Iran indicated that around 30 vessels had crossed the Strait of Hormuz in recent hours, while Tehran has reportedly begun allowing transit for some Chinese ships. Meanwhile, US Secretary of State Marco Rubio urged China to use its influence on Iran to help reopen the Strait of Hormuz. According to the White House, Xi also expressed interest in increasing purchases of US crude oil. Meanwhile, the IEA said crude and fuel shipments through the Strait of Hormuz fell by nearly 6 million barrels per day in the first quarter and warned that the global oil market is likely to remain significantly undersupplied until October, even if the conflict ends next month. Adding to supply concerns, Saudi Arabia informed OPEC that its oil production had dropped to its lowest level since 1990.

Brent crude futures steadied near $106 per barrel on Thursday, pausing their recent advance as investors shifted focus to the upcoming meeting between US President Donald Trump and Chinese President Xi Jinping. The leaders are expected to center discussions on trade rather than tensions surrounding the Iran war, although Washington recently intensified pressure on Tehran by threatening banks and imposing fresh sanctions on entities involved in Iranian oil sales to China, the largest importer of its crude. Meanwhile, the US Energy Information Administration reported that crude oil and fuel flows through the Strait of Hormuz declined by nearly 6 million barrels per day in the first quarter after the Middle East conflict erupted in late February. The IEA also warned that the global oil market is likely to remain heavily undersupplied until October even if the conflict ends next month, while Saudi Arabia informed OPEC that its oil output fell to the lowest level since 1990