2026.05.14

Oil Inches Higher Ahead of Trump-Xi Summit as Iran Tightens Grip on Hormuz

Oil prices edged higher ahead of the Trump-Xi summit in Beijing, with Brent at $105.76/bbl and WTI at $101.14/bbl as markets stayed focused on the Iran war and Hormuz disruptions. Trump is expected to discuss the conflict with Xi Jinping, although analysts see little chance of China offering major support to Washington. Iran has further tightened control over the Strait of Hormuz by arranging separate oil and LNG transit deals with countries including Iraq and Pakistan, raising concerns that prolonged disruption could trigger renewed military escalation. China remains the biggest buyer of Iranian crude, with more than 80% of Iran’s seaborne exports in 2025 reportedly heading to Chinese independent refiners purchasing discounted sanctioned oil.

Chinese VLCC Exits Hormuz

A Chinese-owned VLCC, Yuan Hua Hu, successfully sailed out of the Strait of Hormuz carrying nearly 2 million barrels of Iraqi crude, marking only the third Chinese supertanker transit since the Iran conflict began. The vessel, operated by units of COSCO Shipping and reportedly chartered by Sinopec’s trading arm Unipec, is heading toward Zhoushan, China, despite the risk of encountering the U.S. naval blockade in the Gulf of Oman. The transit comes ahead of talks between Donald Trump and Xi Jinping, where China’s continued purchases of Iranian-linked crude are expected to remain a sensitive issue.

Norwegian-Flagged Tanker Crosses Hormuz for First Time Since March

The Norwegian-flagged 45,730-dwt product tanker Stella became the first vessel under Norway’s flag to transit the Strait of Hormuz since early March, navigating near Iran’s Larak Island while broadcasting that it was Iraqi-owned and crewed by Russians. The ship, managed by Nouri Alwan Marine, appeared heavily laden with a reported 12.4-metre draught during the voyage through increasingly restricted Gulf waters.

Iranian Drone Strike Causes Fuel Leak From Adnoc VLCC Near Oman

Adnoc Logistics & Services said its VLCC Barakah was struck by two Iranian drones off Oman on May 4, causing a small bunker fuel leak while the vessel remained anchored near the Musandam Peninsula. No crew were injured and the tanker was not carrying cargo, but satellite imagery showed an oil slick trailing from the ship, highlighting growing environmental risks from attacks in the Gulf. Adnoc has managed to continue some crude exports from the Gulf, including cargoes transferred via ship-to-ship operations for delivery to Asia.

IEA Warns Global Oil Stocks Are Falling at Record Pace

The International Energy Agency said global oil inventories are being depleted at an unprecedented rate as the Iran war continues to disrupt Middle East energy supplies and keep the Strait of Hormuz effectively shut. Global stockpiles fell by about 4 million bpd in March and April, while total supply losses since February have reached 12.8 million bpd, with more than 1 billion barrels cumulatively removed from the market. The IEA warned the market will remain “severely undersupplied” until at least October even if the conflict ends next month, as oil flows through Hormuz would take months to normalize. Although emergency stock releases and increased exports from the US, Brazil, Canada and Venezuela are providing partial relief, the agency said continued inventory declines will keep upward pressure on oil prices and heighten market volatility.

Saudi Arabia Says April Crude Output Fell to 6.316M BPD, Lowest Since 1990 Gulf War

Saudi Arabia told OPEC its crude oil production fell again in April to 6.316 million bpd, the kingdom’s lowest level since 1990 during the Gulf War, as the Iran conflict continued to disrupt Persian Gulf exports. OPEC data showed the wider group’s production also plunged sharply, with Saudi Arabia accounting for roughly half of the overall decline. Although Riyadh has partly softened the impact by rerouting some exports through Red Sea pipelines, other Gulf producers such as Kuwait have suffered even steeper losses.

North Sea Crude Trades at Discount as Europe Weathers Hormuz Disruption

North Sea Forties crude traded at a discount to Dated Brent for the first time since the Iran war began, signaling that immediate fears of a severe oil shortage in Europe have eased. Traders said Europe has remained relatively resilient because it relies less on Middle Eastern crude, while rising US exports and weaker Chinese demand have helped absorb the global supply shock caused by the Strait of Hormuz disruption. Additional cargoes from the US Gulf Coast, West Africa, and Latin America have also been redirected toward European refineries, increasing regional supply availability.

India Rushes to Secure Russian Crude Ahead of US Waiver Expiry

India’s imports of Russian oil surged to a record 2.3 million bpd so far in May as refiners accelerated purchases before a temporary US sanctions waiver expires on May 16. Even with imports expected to ease later in the month, flows are still projected to average a strong 1.9 million bpd, highlighting India’s heavy reliance on discounted Russian crude amid the Iran war and Hormuz disruption. To prepare for potential supply shortages, Indian refiners have also secured prompt cargoes from the US and West Africa while exploring additional supplies from Azerbaijan and Africa. Analysts warn that without an extension of the waiver, India may be forced to buy significantly more expensive spot barrels in an increasingly tight global oil market.

Russia to Raise ESPO Crude Exports to Asia as Kozmino Capacity Expands

Transneft plans to increase ESPO Blend crude exports from the Kozmino port in Russia’s Far East to 4.3 million metric tons in May, up from 4.1 million tons in April. The increase represents a 1.5% rise in daily exports to about 1.04 million bpd, continuing a steady expansion in shipments to Asian markets since last summer. Transneft said it is expanding the Eastern Siberia-Pacific Ocean (ESPO) pipeline system, with completion targeted for 2029, to further boost exports through Kozmino. ESPO Blend has become Russia’s key crude grade for Asia as Moscow redirects oil flows eastward following Europe’s sharp reduction in Russian energy imports since 2022.

Libya Targets Ras Lanuf Refinery Restart Within One Year After Decade-Long Shutdown

National Oil Corporation aims to restart the 220,000 bpd Ras Lanuf refinery within 6–12 months after securing full ownership of the facility following the end of a long-running dispute with Emirati partner Trasta. NOC Chairman Masoud Suleman said maintenance work is expected to cost around $60 million, with initial operations planned at roughly 200,000 bpd before gradually reaching full capacity. The refinery, Libya’s largest, has been idle since 2013 amid political instability and arbitration disputes that have repeatedly disrupted the country’s oil sector since the 2011 uprising. Ras Lanuf’s output will mainly supply Libya’s domestic fuel market using the country’s Amna crude grade.