Oil prices rose in Asian trading on Friday and headed for sharp weekly gains, as the Strait of Hormuz remained effectively closed and investors awaited a second day of talks between U.S. President Donald Trump and Chinese President Xi Jinping in Beijing.
Brent Oil Futures rose 0.8% to $106.52 a barrel, while Crude Oil WTI Futures gained 0.7% to $101.84 a barrel.
Both contracts were set to jump roughly 5%-7% for the week.
The market remained focused on the Strait of Hormuz, through which about one-fifth of global oil supply normally flows.
Although Iranian state media said around 30 vessels had crossed the waterway this week, shipping traffic remains far below normal levels, and tanker operators are still reluctant to resume regular transit amid security risks.
A ship seizure near the Gulf of Oman and continued military patrols in the region also reinforced fears that energy exports from the Middle East could remain constrained for an extended period.
Investors were also closely watching the Trump-Xi summit in Beijing, where discussions have centered on the Iran conflict, energy security, and trade ties.
According to White House statements, both leaders agreed the Strait of Hormuz must remain open for global energy flows, while Xi expressed interest in increasing purchases of U.S. crude oil to diversify supplies away from the Gulf chokepoint.
Analysts said hopes that China could pressure Iran toward a broader settlement had helped limit some of the latest price surge.
However, Trump struck a hawkish tone on Iran in a Truth Social post early Friday, saying “the military decimation of Iran (to be continued!).”
Supporting crude prices further, U.S. Energy Information Administration data showed on Wednesday that domestic crude inventories fell by 4.3 million barrels last week, more than analysts had expected, pointing to resilient export demand and tighter supply conditions.
The International Energy Agency warned this week that the global oil market could remain “severely undersupplied” through October even if the conflict eases next month.
