Oil prices today (May 15): Crude above $105 as Iran war resolution stalls. Where does liquid gold go?

Oil prices rose on Friday as concerns about ship attacks and seizure of ships kept traders wary, after Iran said about 30 vessels had safely crossed the Strait of Hormuz.

Markets were also watching closely as US President Donald Trump and Chinese President Xi Jinping entered a second day of talks in Beijing.

Crude Oil Price on May 15

Brent crude futures were up 60 cents, or 0.57%, at $106.32 a barrel by 0100 GMT. US West Texas Intermediate crude futures were up 54 cents, or 0.53%, at $101.71 a barrel.

Trump and Xi are expected to meet again on Friday as the two-day state visit ends. US Trade Representative Jamieson Greer said China is being “very pragmatic” regarding Iran and noted that keeping the Strait of Hormuz open is important to Beijing. Speaking to Bloomberg, Greer said uninterrupted movement through the route is a major concern for China.

Geopolitical tensions, however, remained elevated. In a Truth Social post early Friday morning, Trump said the “military destruction of Iran (will continue!). He also hoped that relations with China would be “stronger and better than ever!”

The International Energy Agency warned this week that the market could remain “severely undersupplied” even if hostilities end next month. US inflation data released earlier this week also pointed to renewed price pressures linked to the conflict, adding to the political challenges for Trump ahead of November’s midterm elections.

Meanwhile, the US naval blockade around Iranian ports remains active, and shipping conditions in the region continue to be dangerous. A commercial vessel was seized by unauthorized personnel near the entrance to the Strait of Hormuz before being towed into Iranian waters on Thursday.

While a ceasefire has been formally in effect since early April despite repeated flare-ups, little progress appears to have been made between Washington and Tehran toward a lasting solution. Trump recently said the ceasefire was on “huge life support” and criticized Iran’s response to his proposal to end the conflict.

Analysts at Morgan Stanley said the global oil market was now in a “race against time”, warning that factors limiting a sharp rise in crude prices could weaken if the Strait of Hormuz remains closed until June.

Despite the disruptions affecting nearly 1 billion barrels of oil supply, crude prices are still below the highs reached in 2022 after Russia’s invasion of Ukraine. Analysts led by Martijn Rates said the market entered the current crisis with strong supply buffers, while investors largely believed the straits would eventually reopen.

Morgan Stanley added that higher US crude exports and softer Chinese imports have so far helped protect the market from a deeper supply shock. However, the brokerage warned that a prolonged shutdown of Hormuz could once again tighten global supplies if disruptions persist beyond what China or the United States can comfortably manage.

Haitong futures said markets remained cautious and warned that the truce could only be temporary. The brokerage added that stalled talks between Washington and Tehran could trigger another escalation, pushing oil prices higher.

Saudi Aramco CEO Amin Nasser said on Monday that the disruption of shipments through Hormuz could delay the return of stability to oil markets until 2027, potentially affecting oil supplies by about 100 million barrels per week.

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