Oil prices dips as Iran ceasefire wavers ahead of Trump-China summit
By Aloys Michael, May 13, 2026Oil prices fell on Wednesday after rising in three consecutive sessions, as investors awaited developments around the fragile ceasefire in the Iran war and U.S. President Donald Trump headed to China for a high-stakes summit with President Xi Jinping.
Brent crude futures lost 82 cents, or 0.76 per cent, to trade at about Ksh16,600, per barrel, and U.S. West Texas Intermediate futures fell 66 cents, or 0.65 per cent, to Ksh13,100.
Both benchmarks have largely hovered around or above the Ksh12,900 per barrel mark since the U.S. and Israel began attacks on Iran at the end of February, and Tehran effectively shut the Strait of Hormuz.
Oil prices rose by over 3 per cent on Tuesday, May 12, 2026, extending earlier gains as hopes for the lasting U.S.-Iran ceasefire faded, dimming prospects of reopening the strait, through which about a fifth of global oil and liquefied natural gas normally flows.
Trump said on Tuesday he does not think he will need China’s help to end the war with Iran, even as hopes for a lasting peace deal dwindled and Tehran tightened its grip over the strait.
China is the biggest buyer of Iranian oil despite pressure from the Trump administration. Trump meets his Chinese counterpart, Xi, in Beijing on Thursday and Friday.
“The length of the disruption and the scale of the supply loss – already more than 1 billion barrels – means oil prices are likely to remain above Ksh10,300, per barrel for the rest of the year,” Eurasia Group said in a client note.
The war with Iran has started to take its toll on the U.S. economy, the world’s biggest, as higher oil prices lead to more expensive fuels, and economists expect to see second-round effects in the months ahead.
In April 2026, the US consumer prices rose sharply for a second straight month, resulting in the largest annual increase in inflation in nearly three years, bolstering expectations that the Federal Reserve would keep interest rates flat for a while.
Elevated interest rates make borrowing more expensive, potentially denting oil demand.
As the Iran war continues, U.S. crude oil inventories fell for a fourth straight week last week, and distillate inventories also declined, according to market sources citing American Petroleum Institute data.