President Xi Jinping signaled interest in increasing U.S. oil purchases during a Beijing summit with President Trump, according to a White House official. This move aims to reduce China's reliance on the Strait of Hormuz. Ongoing Middle East conflict has effectively closed the critical waterway and disrupted global supplies.
China currently ranks as the world's largest importer of crude oil. A long-term shift toward U.S. supply would represent a major realignment of global energy trade.
The Thursday meeting addressed energy shortages caused by the regional crisis. Increased Chinese demand represents a potential long-term catalyst for U.S. energy producers held in the VDE ETF.
Brent crude futures fell 2% to $105.63 on May 14. Fears of U.S. interest rate hikes to combat inflation overshadowed these geopolitical developments.