The price of oil is up by almost 40% this year, despite fears of a global economic slowdown and the trade war between the US and China.

It is not hard to find the reasons why crude is soaring, given there are supply disruptions in Venezuela and Libya. Then there is Iran.

Geopolitical risk has intensified as the White House has tightened sanctions on Tehran’s oil exports and upped the rhetoric.

“If Iran want to fight, that will be the official end of Iran,” barked Donald Trump while saying he was “very happy” with the ongoing Beijing trade war.

The value of Brent futures on the international market reached just under $73 per barrel at the start of this week. Prices rose as Saudi Arabia and other Opec members gathered in Jeddah signaling they would keep production cuts in place.

“We need to stay the course and do that for the weeks and months to come,” said Saudi oil minister Khalid Al-Falih.

Russia, which has supported the output restraints, said it would continue to do so for the second half of 2019 if that is what Opec decided.

But the Russian energy minister, Alexander Novak, also said the major oil exporter would be willing to open the production taps if the market needed more crude.

On the trade front, there were hopes that Trump and Chinese President Xi Jinping were moving towards some kind of resolution to their standoff.

But the decision by Trump to raise tariffs on nearly $200 billion of Chinese goods on May 10 has led Beijing to retaliate with its own greater restrictions from June 1.

Most analysts still expect a resolution before the end of the year, but who can be sure? Restrictions imposed by Google on Chinese mobile phone company Huawei have just ratcheted up the tension between the two nations. Chinese economic growth is slowing already, with oil demand down in March for the first time since 2014 and car sales down 10% last year.

One official has admitted the trade war with the US could slash 1% of gross domestic product this year.

The official Chinese GDP target for this year was meant to be 6% to 6.5%, already down from around 6.5% in 2018.

Trump has said bluntly he believes China wants to replace the US as the world’s leading superpower and “it's not going to happen with me”.

These kinds of boasts appall some Americans but delight his supporters, and many analysts are now thinking Trump may be here to stay.

Robert Carnell, ING bank’s chief economist and head of research for Asia-Pacific, said: “Short of a US economic disaster, I think he’s got a good chance of winning” the next presidential election.

One way to crank up chauvinism at home is to pick fights abroad.

The evacuation of some ExxonMobil workers from Iraq has ramped up fears the US expects worse, not better, from the Middle East.

No-one is still sure who caused the sabotage attack on four tankers off the coast of Fujairah, but it has raised prospects of military confrontation between Washington and Tehran.

Some oil analysts are convinced that should one major attack on a Saudi ship or refinery occur, the price of crude will shoot though the roof.

This week regional tensions seemed to ease just a little, but sentiment is volatile and oil prices are likely to remain supported while the uncertainty stays high.

Weekly

Uncertainty set to keep oil prices high