Oil prices have gained more than 1% following President Trump's statement that he would not be much more patient with Iran, as reported by Reuters. Brent crude oil futures rose $1.32, or 1.25%, to $107.04 a barrel by 0425 GMT, while U.S. West Texas Intermediate futures were up $1.33, or 1.31%, to $102.50. For the week, Brent has climbed nearly 6% while WTI has jumped more than 7% on uncertainty over the shaky ceasefire in the Iran conflict. The price movement reflects ongoing supply disruptions in the region and geopolitical tensions that continue to support oil markets. Brent crude has risen nearly 6% in the past one week and more than 12% in the last one month period, as reported by exchange data. Oil prices swung several times yesterday but still closed near the day's high, according to Yang An, analyst at Haitong Futures, who noted that ships passing through the strait eased some market concerns but not enough to change the strong trend driven by tight supply.
"I am not going to be much more patient," Trump said in an interview with Fox News on Thursday night, referring to Iran. "They should make a deal." As per Reuters, this latest warning from the U.S. President has reinforced market concerns about the ongoing conflict. The White House said Trump and Chinese President Xi Jinping agreed on the need to keep the crucial shipping route open during their ongoing summit in Beijing. This diplomatic development provides some relief to global energy markets, as both leaders recognize the strategic importance of maintaining open shipping lanes through the Strait of Hormuz.
The Strait of Hormuz remains at the centre of market concerns as it handles nearly one-fifth of global oil shipments under normal conditions, according to Reuters. Although Iran's Revolutionary Guards claimed around 30 vessels had crossed the strait since Wednesday evening, the figure remains far below the roughly 140 daily crossings recorded before the war began. This significant reduction in shipping activity continues to keep markets on edge about potential supply disruptions. Saudi Aramco CEO Amin Nasser warned that Strait of Hormuz disruptions could delay a return to market stability until 2027, with approximately 100 million barrels of oil per week at risk of being withheld from global markets. This equates to roughly 14.3 million barrels per day of potential supply disruption, which would represent one of the largest proportional disruptions in the history of modern oil markets.
Prime Minister Narendra Modi departed for his five-nation, six-day tour today (May 15), with the United Arab Emirates (UAE) as his first stop. The brief visit to Abu Dhabi is expected to focus on energy security, trade diversification, and strengthening of the Comprehensive Strategic Partnership between the two countries. PM Modi will meet UAE President Sheikh Mohamed bin Zayed Al Nahyan, with energy security poised to take centrestage. According to a Reuters report, two landmark agreements are expected to be finalised during the visit. The talks aim to strengthen trade, renewable energy ties, and ensure stable fuel supplies for India, addressing the country's concerns about oil price volatility and energy security.
Wholesale inflation has shot up to 8.30% in April from 3.88% in March, according to NDTV Profit data, primarily due to the increase in crude oil prices resulting from the US-Iran conflict. This significant inflationary pressure reflects the broader economic impact of elevated energy costs on the global economy. The surge in wholesale inflation demonstrates how oil price volatility directly translates into higher costs for businesses and consumers across multiple sectors. Oil prices in the $100 to $115 per barrel range do not stay confined to the energy sector, their effects propagate through the broader economy in ways that complicate central bank policy, compress corporate margins, and disproportionately burden import-dependent nations. The inflationary pressure comes as oil prices surge to $107/bbl after Trump signals US-Iran conflict will continue in West Asia, with the conflict nearing the end of the 11th week since beginning at the end of February this year.
