The Trump-Xi summit was supposed to calm oil markets. Instead, it may have convinced traders that the global energy system is adapting to a prolonged Hormuz disruption rather than preparing for its resolution.
Brent crude surged toward $110 today after traders reassessed the implications of comments made by US President Donald Trump following his two-day meeting with Chinese President Xi Jinping in Beijing. Rather than signaling coordinated pressure on Iran to fully reopen the Strait of Hormuz, Trump emphasized plans for significantly expanded Chinese purchases of American oil exports.
“They’ve agreed they want to buy oil from the United States,” Trump said in an interview with Fox News. “We’re going to start sending Chinese ships to Texas and to Louisiana and to Alaska.”
That message appears to have fundamentally altered market psychology.
Before the summit, many investors had hoped Beijing would use its leverage as the largest buyer of Iranian oil to pressure Tehran into ending shipping disruptions and reducing tensions in the Gulf. A credible Hormuz reopening would likely have triggered a sharp collapse in crude prices by removing much of the war premium embedded in energy markets.
But instead of hearing a pathway toward reopening the Strait, markets increasingly heard something very different: a rerouting of global supply chains around a continuing disruption.
That distinction matters enormously.
If China increasingly replaces Iranian barrels with American energy supplies, Beijing may have less strategic incentive to defend Iranian export infrastructure or oppose more aggressive US actions against Tehran. Some traders interpret the summit outcome as raising — not lowering — the probability of future military escalation.
As a result, oil markets are beginning to shift toward pricing a more structural fragmentation of global energy trade flows. The summit did not solve the war. It may simply have reorganized the winners and losers. That helps explain why oil prices are accelerating higher rather than retreating despite two days of high-level diplomacy.
Technically, as Brent crude’s rise from 96.03 resumed through 108.45 resistance today, the key focus is on 61.8% projection of 96.03 to 108.45 from 103.88 at 111.56. Firm break there could prompt upside acceleration to 100% projection at 116.30.
More importantly, any upward acceleration through 115.30 resistance the first indication that whole converging triangle pattern from 119.50 high made in March has completed. That could set up long term up trend resumption through the key 120 psychological barrier.
