Oil Prices Jump After Middle East Strikes; China's Exports Boom Thanks to AI

Oil prices jumped more than 2% this week after fighting in the Middle East grew worse. The United States carried out strikes against Iran for the third night in a row. Two oil tankers were also attacked in the Strait of Hormuz, a key waterway used to ship oil around the world.

The main global oil price, called Brent crude, rose 2.2% to $85.15 per barrel. It briefly hit $85.64 earlier in the day during trading in London. President Donald Trump said the U.S. would block Iranian ships in the Gulf but promised the Strait of Hormuz would stay open for all other ships.

Financial experts said markets were tense as investors waited to see what would happen next. Susannah Streeter of the Wealth Club said people were bracing for higher energy costs to spread through economies. She also noted that European gas prices had jumped to levels not seen in three months.

At the same time, China shared strong trade news. Exports grew 27% compared to the same time last year, the biggest jump in four months. That number was much higher than the 18.2% growth that economists had expected.

Imports into China also surged, rising 36% — a five-year high. China posted a trade surplus of $125.6 billion in June, up from $105.4 billion the month before. A trade surplus means a country earns more from selling goods abroad than it spends on buying goods from other countries.

Much of China's export growth came from the global boom in AI technology. Countries around the world are buying huge amounts of computer chips and computing equipment to build AI systems. China is one of the biggest suppliers of these products.

China is likely to record a trade surplus above $1 trillion for the second year in a row. The country has been depending heavily on exports because spending at home has been slow. A long-running crisis in China's housing market has made people less willing to spend money.

Imports from South Korea, a major chip-making country, jumped 85% last month. Purchases from Taiwan, another big chip producer, rose 41.1% over the same period. These numbers show just how much demand there is for the technology that powers AI systems.

Economist Xu Tianchen said he expects China's exports to stay strong in the second half of the year. He pointed to AI demand, more government spending, and the hope that Middle East tensions could calm down. However, he warned that spending inside China is still weak, with retail sales nearly flat.

China's share of manufacturing sales that come from exports has grown a lot. In early 2025, exports made up 24% of all manufacturing sales — the highest level since China joined the World Trade Organization in 2001. A research firm called this level 'remarkable' for the world's second-largest economy.