Oil edges up as investors focus on Trump-Xi meeting in Beijing
Trump is expected to encourage China to convince Iran to make a deal with Washington to end the Middle East war, but analysts doubt that Xi will be willing to push Tehran too hard.
A drone view of a pump jack and drilling rig south of Midland, Texas, US, on Jun 11, 2025. (File photo: Reuters/Eli Hartman)
BEIJING: Oil prices rose on Thursday (May 14), with markets focusing on the high-stakes meeting between US President Donald Trump and Chinese President Xi Jinping to see if it will yield any positive result on the Iran war, which has significantly disrupted global oil supply.
Aside from trade matters, Trump is expected to encourage China to convince Tehran to make a deal with Washington to end the conflict, but analysts doubt that Xi will be willing to push its long-time strategic partner too hard.
Brent crude futures were up 26 cents, or 0.25 per cent, to US$105.89 a barrel by 2.50am GMT (10.05am, Singapore time), while U.S. West Texas Intermediate futures rose 32 cents, or 0.32 per cent, to US$101.34.
Both benchmark oil futures contracts fell on Wednesday as investors worried about possible US interest rate hikes as higher fuel prices spur inflationary pressures. Brent crude futures fell more than US$2 a barrel, while WTI futures fell more than US$1.
Trump received a grand welcome at Beijing's Great Hall of the People on Thursday ahead of talks with China's Xi Jinping set to cover their fragile trade truce, the Iran war and US arms sales to Taiwan.
"Oil prices are in a wait-and-see mode," said ING analysts in a note on Thursday, adding that the market could be pinning too much hope on the US-China talks yielding some positive results on Iran.
The Strait of Hormuz, a key energy gateway, has been largely shut since the war broke out at the end of February.
While Trump has said he did not think he would need China's help to end the war, the president is nonetheless expected to ask Xi for assistance in resolving the costly and unpopular conflict.
"Failure to make meaningful progress on reopening the strait could leave the US with few options other than renewed military action," IG analyst Tony Sycamore said in a note.
Iran, meanwhile, appears to have tightened its control over the strait, cutting deals with Iraq and Pakistan to ship oil and liquefied natural gas from the region.
A Chinese supertanker carrying two million barrels of Iraqi crude sailed through the Strait of Hormuz on Wednesday after being stranded in the Gulf for more than two months due to the US-Iran war. It was only the third oil tanker to exit the strait since the war began.
Global oil supply will fall short of total demand this year as the war wreaks havoc on Middle East oil production and drains inventories at an unprecedented pace, the International Energy Agency said on Wednesday, upending its earlier outlook calling for a surplus.
