By: Economy Middle east

Oil prices climbed further on Friday and were on track for strong weekly gains, as the Strait of Hormuz stayed effectively shut while investors looked ahead to a second day of talks in Beijing between U.S. President Donald Trump and Chinese President Xi Jinping.

As of 4:06 GMT, Brent crude futures climbed $1.26, or 1.19 percent, to $107 a barrel, while U.S. West Texas Intermediate crude futures rose $1.29, or 1.28 percent, to $102.5.

Both benchmarks were on track to gain over 5 percent for the week.

Strait of Hormuz risks persist

The market remained focused on the Strait of Hormuz, a key chokepoint through which roughly one-fifth of global oil supplies typically pass.

While Iranian state media reported that around 30 vessels had crossed the waterway this week, shipping activity remained well below normal levels, with tanker operators still hesitant to fully resume transit due to ongoing security concerns.

A vessel seizure near the Gulf of Oman, along with continued military patrols in the region, further heightened fears that Middle East energy exports could face prolonged disruptions and oil prices could remain elevated.

China interested in increasing U.S. crude oil purchases

Investors were also closely watching the summit in Beijing between Trump and Xi, where discussions have centered on the Iran conflict, energy security and trade ties.

According to White House statements, both leaders agreed that the Strait of Hormuz must remain open to safeguard global energy flows, while Xi reportedly expressed interest in increasing purchases of U.S. crude oil to diversify supplies away from the Gulf chokepoint.

Trump and the Chinese President are set to meet on Friday to conclude a two-day state visit marked by ceremonial events and business deals.

U.S. Trade Representative Jamieson Greer said on Friday that China had taken a “very pragmatic” approach toward involvement with Iran, adding in an interview that keeping the Strait of Hormuz open was important to Beijing.

Analysts said hopes that China could push Iran toward a broader resolution had helped cap some of the recent gains in oil prices.

However, Trump adopted a hawkish stance on Iran in a recent interview, noting that he would not be much more patient with ⁠Tehran, urging it to reach a deal with Washington.

U.S. crude inventories fall 4.3 million barrels

Further supporting oil prices, data from the U.S. Energy Information Administration on Wednesday showed domestic crude inventories fell by 4.3 million barrels last week, exceeding analysts’ expectations and signaling resilient export demand and tighter supply conditions.

The International Energy Agency also warned this week that the global oil market could remain “severely undersupplied” through October even if tensions ease next month.