Global crude oil prices posted their steepest weekly gain in months, with Brent crude and WTI each surging more than 8 per cent for the week ending 16 May, as renewed hostility between Washington and Tehran all but extinguished hopes of a swift reopening of the Strait of Hormuz — the chokepoint through which nearly one-fifth of the world's oil and liquefied natural gas supplies flow.

Weekly and Friday Settlements

Brent crude futures settled at $109.26 a barrel on Friday, advancing $3.54 or 3.35 per cent in the session alone, and finishing the week up 7.84 per cent. US West Texas Intermediate (WTI) crude closed at $105.42 a barrel, gaining $4.25 or 4.2 per cent on Friday and surging 10.48 per cent over the full week — its sharpest weekly advance in recent memory.

What Iran's Foreign Minister Said

Investor sentiment deteriorated sharply after Iranian Foreign Minister Abbas Araqchi declared that Tehran has 'no trust' in the United States and would engage in negotiations only if Washington demonstrated genuine seriousness. Araqchi added that Iran remains prepared for both renewed conflict and diplomatic engagement — a dual signal that markets read as deeply bearish for near-term supply stability.

The remarks arrived as US President Donald Trump expressed mounting frustration with Iran, reiterating that Tehran cannot be permitted to develop a nuclear weapon and demanding that the Strait of Hormuz be reopened without delay.

Why the Strait of Hormuz Matters

The Strait of Hormuz is the primary export corridor for major Gulf producers including Saudi Arabia, Iraq, and Qatar. Any sustained disruption to shipping through the waterway would immediately constrain global supply, amplifying price pressures already elevated by geopolitical risk. Markets had initially priced in a degree of optimism following a ceasefire between Iran and its regional rivals, but the latest rhetoric from both capitals has sharply reversed that sentiment.

Trump-Xi Meeting Adds Another Layer

During President Trump's visit to China, he said he and Chinese President Xi Jinping had agreed that Iran should not possess nuclear weapons. Xi did not publicly comment on the matter, but China's foreign ministry issued a statement saying the conflict 'should never have happened' and 'has no reason to continue.' Separately, Xi reportedly cautioned that US-China bilateral ties could face serious risks if the Taiwan issue remains unresolved — a reminder that the diplomatic backdrop extends well beyond the energy market's immediate focus.

What Markets Are Watching Next

Analysts note this is a supply-shock scenario driven by geopolitical uncertainty rather than a fundamental demand shift — making price moves volatile and potentially reversible. Any credible diplomatic signal from either Washington or Tehran could trigger a sharp correction, while an escalation toward the Strait could push Brent toward levels not seen since the post-pandemic spike. For India, which imports roughly 85 per cent of its crude requirements, a sustained rally at these levels would widen the current account deficit and add pressure on the rupee.