WTI US oil rose on Friday, trading near $100.90 at the time of writing. It was up 3.13% on the day, broke above $100, and reached a new weekly high.
Markets reacted to comments from US President Donald Trump after a summit with Chinese President Xi Jinping. Trump said China agreed to buy US oil, but Chinese authorities have not confirmed this.
The two-day meeting ended on Friday with no major announcement on reopening the Strait of Hormuz, a key route for global oil exports. Trump said Beijing committed to taking part in reopening the waterway, without giving operational details.
Attention remains on the Strait of Hormuz due to supply risks. Rabobank analysts said a temporary closure would push energy prices higher, while a longer disruption could reduce demand in several industrial sectors.
Rabobank said that if the strait stayed closed for several months, Europe could avoid physical shortages through higher prices. It added that a disruption lasting close to one year could drain buffers and hit aviation, logistics, and industries relying on air freight.
We should remember the sharp rally in 2025 when WTI crude broke past $100 a barrel based on comments alone. Today, with WTI trading near a more subdued $85, the market remains highly sensitive to geopolitical headlines. This history shows that unconfirmed statements can trigger significant price swings, creating opportunities for nimble traders.
Tensions in the Strait of Hormuz are once again a primary concern, just as they were last year. Recent satellite data shows an increase in naval patrols in the region, and the CBOE Crude Oil Volatility Index (OVX) has climbed to 38, reflecting market anxiety. A repeat of the supply disruption fears seen in 2025 could easily add a $10 risk premium to current prices.
Unlike the scenario in 2025, however, the demand picture is less certain. China’s latest Caixin Manufacturing PMI for April 2026 registered at 50.9, indicating slowing industrial momentum, while their oil imports have been flat for two consecutive months. This contrasts with the stronger demand assumptions that fueled last year’s rally.
At the same time, U.S. crude production remains robust, with the EIA confirming output holding above 13.5 million barrels per day in the first quarter of 2026. This strong supply acts as a cap on prices, creating a tense balance between supply risks and demand weakness. Traders should therefore consider options strategies like long strangles, which can profit from a significant price move in either direction as these opposing forces battle for dominance in the coming weeks.
