New Delhi: Global oil markets remained relatively calm on Thursday as US President Donald Trump and Chinese President Xi Jinping amid expectations of a diplomatic breakthrough in the West Asia conflict, even as fresh attacks on commercial vessels in the region underscored the fragility of the ceasefire and kept investors on edge.
At 7.40 pm India time, the July contract of benchmark Brent crude traded at $105.25 per barrel, down 0.25% from its previous close. The June contract of West Texas Intermediate on the NYMEX was down 0.2% at $100.80 a barrel.
The subdued market reaction contrasted sharply with the surge in crude prices to record highs of $126 per barrel on 30 April, after the war and subsequent blockades in the Strait of Hormuz, through which nearly one-fifth of global oil supplies pass, disrupted global energy supplies. The crucial waterway has remained disrupted for nearly 75 days since the outbreak of the Iran conflict, following blockades imposed first by Tehran and later by the US.
The White House said both countries agreed that the Strait of Hormuz must remain open to support the free flow of energy, and that Iran can never have a nuclear weapon. However, a statement issued by China after the meeting made no mention of the strait.
“The two presidents exchanged views on major international and regional issues, such as the Middle East situation, the Ukraine crisis, and the Korean Peninsula,” a statement by the ministry of foreign affairs of China said after the two leaders had met.
In an interview with CNBC on Thursday, US treasury secretary Scott Bessent said that reopening the Strait of Hormuz is in China’s best interests, and he believed Beijing would do what it could to restore shipping through the waterway.
However, uncertainty persists over a potential and the extent to which China—one of Iran’s largest crude buyers and a key diplomatic partner—may play a role in restoring safe passage through the strait.
Observers are hopeful, but cautious. Sankalp Gurjar, assistant professor of geopolitics and geoeconomics at the Gokhale Institute of Politics and Economics, said the emphasis on uninterrupted trade through the Strait of Hormuz sent a positive signal to markets.
“Further, improved relations between the US and China may also lead to enhanced energy supply from the US to China, which would also calm the global oil prices,” he added.
Others cautioned that geopolitical risks remain elevated. Harsh V. Pant, vice-president at the Observer Research Foundation and professor of International Relations at King’s College, London, said: “As Trump has already said that he does not need China’s intervention to resolve the West Asia crisis, we may not see an overt effort by the US to push China to intervene. However, given the strategic importance of the Strait of Hormuz, the conflict has driven global oil inventories down at a record pace.”
Amid stalled efforts towards a US-Iran peace agreement, the International Energy Agency said in its monthly oil market report released on 13 May that global oil markets would remain severely undersupplied through the end of the third quarter of 2026, even if the conflict ends by early June.
Fresh attacks
Amid Trump’s two-day visit to China, fresh attacks on vessels were reported in West Asia, including an India-flagged vessel, Haji Ali, which sank in Omani waters. The ministry of external affairs noted that all 14 crew members have been rescued by Omani authorities.
Condemning the attack, Randhir Jaiswal, spokesperson of the ministry of external affairs, said in a tweet: “The attack on an Indian-flagged ship off the coast of Oman yesterday is unacceptable and we deplore the fact that commercial shipping and civilian mariners continue to be targeted. All Indian crew on board are safe and we thank the Omani authorities for rescuing them. India reiterates that targeting commercial shipping and endangering innocent civilian crew members, or otherwise impeding freedom of navigation and commerce, should be avoided.”
Amid efforts to ensure safe passage for India-bound energy vessels, two LPG (liquefied petroleum gas) carriers chartered by state-run Indian Oil Corporation and carrying a combined 66,392 metric tonnes of cargo crossed the Strait of Hormuz since Wednesday, according to government officials.
Mukesh Mangal, additional secretary in the ministry of ports, shipping and waterways, told reporters that NV Sunshine, a Vietnam-flagged LPG carrier carrying 46,427 MT of LPG, is expected to arrive at New Mangalore on 18 May 2026.
Another vessel, a Marshall Islands-flagged LPG carrier SYMI carrying 19,965 MT of LPG cargo for India, is expected to arrive at Kandla on 16 May, he added.
supplies remain particularly vulnerable to disruptions in the Strait of Hormuz, with nearly 90% of the country’s LPG imports sourced from West Asia. India consumes around 33 million tonnes of LPG annually.