Oil Price Today (May 15): Crude oil above $105 as Iran war resolution stagnates. Where is liquid gold headed?

Oil prices moved higher on Friday as worries over ship attacks and vessel seizures kept traders cautious, despite Iran stating that nearly 30 ships had safely crossed the Strait of Hormuz.

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

Crude oil price on May 15

Brent crude futures rose 60 cents, or 0.57%, to $106.32 a barrel by 0100 GMT. U.S. West Texas Intermediate crude futures gained 54 cents, or 0.53%, to $101.71 a barrel.

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

Geopolitical tensions, however, remained elevated. In a Truth Social post early Friday, Trump said “the military decimation of Iran (to be continued!).” He also expressed hope that ties with China would emerge “stronger and better than ever before!”

The ongoing conflict has significantly tightened global oil supplies, with the International Energy Agency warning this week that the market may stay “severely undersupplied” until October even if hostilities end next month. U.S. inflation data released earlier this week also pointed to renewed price pressures linked to the conflict, adding to political challenges for Trump ahead of the November midterm elections.

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

While a ceasefire has formally been in place since early April despite repeated flare-ups, there appears to be little progress between Washington and Tehran toward a lasting resolution. Trump recently said the truce was on “massive life support” and criticised Iran’s response to his proposal to end the conflict.

Analysts at Morgan Stanley said the global oil market is now in “a race against time,” warning that the factors limiting a sharper rise in crude prices may weaken if the Strait of Hormuz stays shut into June.

Despite disruptions impacting 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 Rats said the market entered the current crisis with stronger supply buffers, while investors largely continue to believe the strait will eventually reopen.

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

Haitong Futures said markets remain cautious and warned the ceasefire may only be temporary. The brokerage added that stalled negotiations between Washington and Tehran could trigger another escalation, pushing oil prices even higher.

Saudi Aramco CEO Amin Nasser said on Monday that disruptions to shipments through Hormuz could delay stability returning to oil markets until 2027, potentially affecting around 100 million barrels of oil supply every week.

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