Meanwhile, China faces its second-steepest gasoline demand slump on record: File Image/Pixabay.
Oil trading was surprisingly flat on Thursday, with investors getting mixed signals from Iran: on one hand that country’s media stated that about 30 ships had crossed the Strait of Hormuz; but on the other, reports of Iran attacking a vessel and seizing another stoked long-standing supply disruption fears.
Meanwhile, mildly positive sentiment was generated by U.S. president Donald Trump’s visit to China and meeting with its president, Xi Jinping, the outcome of which so far was reportedly an agreement to buy U.S. soybeans, energy, and jets.
Brent on Thursday settled up 9 cents at $105.72 per barrel, while West Texas Intermediate settled up 15 cents at $101.17.
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Oil prices are in a wait-and-see mode
ING analysts
Iran allowing some Chinese vessels to pass through the Strait was said to be the result of diplomatic overtures stemming from the Trump/Jinping meeting; however, although Washington officials said Trump pressed Jinping to end the war with Iran and open the waterway, it wasn’t clear whether any substantial commitments had been secured beyond the two sides agreeing that the Strait must remain open to support the free flow of energy.
A White House statement added, “President Xi also made clear China’s opposition to the militarization of the Strait and any effort to charge a toll for its use.”
ING analysts said in a note on Thursday, “Oil prices are in a wait-and-see mode,” adding that the market could be pinning too much hope on the U.S.-China talks.
In other war-related oil news on Thursday, GL Consulting said in its latest forecast that China could see its gasoline demand slump by as much as 5.5 percent this year from 2025 due to the surge in energy prices; this would be the second-steepest slump on record after a 2022 plunge, when China was under severe pandemic lockdowns.
Also on Thursday, Julianne Geiger, veteran researcher for Oilprice.com, wrote that as flows continue to be choked through the Strait of Hormuz, “Moscow’s flagship Urals blend is essentially printing money: for tax purposes, Russia will calculate May oil revenues using an average Urals price of $94.87 per barrel, the highest level since October 2023.
“That translates into nearly 7,300 rubles per barrel, up 18 percent from April, and nearly 60 percent higher than a year ago……the Kremlin has spent years building a war economy; right now, oil is helping keep the machine fed.”
Ship & Bunker News Team
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