Quick overview

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Oil is headed for a weekly gain as the vital Strait of Hormuz essentially closed, efforts to end the conflict are in limbo, and the disruptions that have upended global markets are expected to persist. Futures are up roughly 6% this week, and Brent crude has risen to trade close to $107 per barrel.

The West Texas Intermediate was more than $102. Regarding Hormuz, President Donald Trump has made contradictory statements. He first told Fox News that the US doesn’t need the waterway open, but he later stated that “we want the straits open” while seated next to Chinese President Xi Jinping in Beijing.

The International Energy Agency stated this week that even if hostilities end next month, the market will remain “severely undersupplied” until October because the war has caused global oil inventories to decline at a record rate.

US data highlighted how the conflict is rekindling inflation, increasing domestic pressure on Trump ahead of the November midterm elections.

Trump and Xi will meet again following their summit on Thursday, during which they discussed the Iran war and the Strait of Hormuz. Although China’s official readout did not list energy as one of the topics they discussed, the US leader stated that Xi is in favor of purchasing more American oil. The Middle East was mentioned.

Despite several flare-ups, a ceasefire has been in effect since early April, but Washington and Tehran don’t seem to be making much headway in resolving their differences. Recently, Trump mocked the Iranian response to his proposal to end the war and claimed that the truce was on “massive life support.”.