Oil prices surged by more than 6% on Wednesday after U.S. President Donald Trump stated he would maintain the American naval blockade on Iran until it agrees to a nuclear deal.

Global benchmark Brent crude futures jumped over 6% to reach 118.33 dollars per barrel by 12:10 p.m. ET, while U.S. West Texas Intermediate (WTI) futures also climbed more than 6% to 106.37 dollars per barrel.

Trump told Axios on Wednesday: "The blockade is somewhat more effective than bombing. They are choking like a stuffed pig, and it's going to get worse for them. They cannot have a nuclear weapon."

He added that "attempts to continue negotiations to end the war have stalled in recent days."

For its part, Iran has refused to reopen the Strait of Hormuz unless the United States lifts the blockade. Tehran's control over the Strait has effectively choked oil exports from the Middle East.

Energy market traders also continue to assess the implications of the United Arab Emirates' surprise decision to withdraw from OPEC, though analysts suggest the impact remains limited as long as the Middle East crisis persists.

Strategists at the Dutch bank ING noted in a research memo issued Wednesday that the UAE's exit from the group of oil-producing nations represents a "major blow" to OPEC. They suggested Trump might welcome the move as it "weakens OPEC's influence in the oil market and could be beneficial for importers and consumers."

They added: "The primary driver for oil prices in the near term remains tied to developments in the Gulf and the timing of the resumption of oil flows through the Strait of Hormuz."

The Federal Reserve kept interest rates unchanged in line with market expectations

China is on track to nearly double its data center capacity over the next five years, with 28 GW of new projects expected to come online by 2030, adding to the 32 GW already installed by the end of last year, according to a recent analysis by Rystad Energy.

Based on currently announced projects, which are likely to be followed by further additions, data center electricity consumption is projected to rise to 289 TWh by 2030. This is more than double last year's levels and represents approximately 2.3% of China's total electricity demand.

Data centers are also expected to become the fastest-growing source of power demand in the country, with an annual growth rate of 19% between 2025 and 2030, driven by the rapid expansion of artificial intelligence and high-performance computing.

Installed capacity is set to reach 40 GW by the end of this year, up from 32 GW at the end of 2025, reflecting the accelerating pace of construction. AI and advanced computing centers are playing an increasing role, accounting for 39% of current capacity, a figure expected to rise to 48% by 2030.

Unlike traditional data centers, these facilities consume significantly larger amounts of power, reshaping the scale and distribution of China's digital infrastructure. This shift was bolstered by the "East Data, West Computing" strategy launched in 2022, which established eight major computing hubs to alleviate resource pressure in the East. This has led to the emergence of clusters in regions like Ulanqab in Inner Mongolia, where companies such as Huawei and ByteDance have secured major projects.

China's data center sector is no longer a marginal part of the energy ecosystem; it has become a structural driver of demand. What distinguishes this expansion is its speed, fueled by AI, which is simultaneously pressuring infrastructure execution schedules and power procurement.

Operators are increasingly relying on a mix of energy sources, such as wind, solar, and battery storage, rather than waiting for government incentives, as securing reliable, low-emission electricity has become a commercial priority.

Rystad Energy expects China's total electricity demand to grow at a compound annual growth rate (CAGR) of 3.9% through 2030, compared to 6.5% during the 14th Five-Year Plan, during which consumption exceeded 10,000 TWh last year.

In contrast, industrial demand growth is expected to slow from 5.4% between 2021 and 2025 to 3% through 2030. Meanwhile, data centers continue to record robust growth, having risen at a CAGR of 38% over the past five years, and are expected to maintain 19% growth until the end of the decade, raising their share of electricity consumption to 2.3%.

China has also placed data center development among its strategic priorities in the 15th Five-Year Plan (2026-2030), focusing on efficiency and the integration of renewable energy. Power Usage Effectiveness (PUE) is a key metric, with the country aiming to reduce it to below 1.5 and reach advanced global levels by 2030.

Strict standards are already being imposed on new centers, which must not exceed a PUE of 1.25, or 1.2 in national computing hubs, compared to advanced global levels of 1.04–1.07 in top-tier facilities.

Chinese companies rely primarily on the national power grid to ensure operational continuity, supported by stable supplies of conventional energy and robust networks capable of absorbing growing demand.

At the same time, this surge represents an opportunity to enhance the use of renewable energy. The 2025 Green Data Center plan mandates that all new projects in national hubs obtain at least 80% of their needs from renewable sources.

Strategies utilized include purchasing Green Electricity Certificates (GECs), direct contracting with solar or wind projects, and on-site self-generation.

Advanced models are emerging in this context, such as the Zhongjin project in Ulanqab, which combines wind, solar, and battery storage, as well as China Mobile’s "Chaidamu" project and Tencent’s cloud computing center, which relies on a mix of solar power and green energy trading.

The nickel market has entered a new phase characterized by tightening supply conditions and deliberate price management by Indonesian authorities. After breaking through the trading range of 17,000 to 18,000 dollars per ton that prevailed over recent weeks, prices rose to approximately 19,200 dollars per ton, settling within the target range of 18,500 to 20,000 dollars. Prices also touched the 19,600 dollar level during a recent session, signaling improved market fundamentals across the supply chain.

This price movement is not viewed as a mere cyclical fluctuation. Mark Selby, CEO of Canada Nickel, believes the market is witnessing the "beginning of a new normal" rather than a temporary squeeze. He noted that structural changes imposed by Indonesia—the world's largest nickel producer—have reshaped the cost curve and supply dynamics, supporting the sustainability of elevated prices over the long term.

In this context, the Indonesian quota system has emerged as a key factor in reducing near-term supply. This follows Eramet’s decision to suspend operations at the "Weda Bay" mine after exhausting its annual ore quota of 12 million tons. This mine is a primary supplier to industrial production complexes in Indonesia, highlighting the effectiveness of the quota system in balancing the market.

Indonesia has adopted several strategic measures to manage the market, most notably shifting from three-year production quotas to annual quotas, granting greater flexibility to increase or decrease supply according to market conditions. This system appears carefully designed to support price increases without causing sharp volatility that could disrupt the market or incentivize the entry of competing supplies.

The Indonesian approach is not limited to physical supply control but also extends to indirect influence on prices. Selby indicated that authorities might resort to "moral suasion" if prices rise too quickly above the 20,000 dollar per ton level, by hinting at possible supply increases or warning against excessive price levels. It is believed that the target range between 20,000 and 21,000 dollars achieves a balance between generating lucrative profits for Indonesian producers and preventing the stimulation of new high-cost production projects in other regions.

At the same time, high input costs are supporting prices, particularly sulfur, which has risen by more than 100 dollars per ton to exceed 1,000 dollars, compared to approximately 150 dollars 18 months ago. For producers utilizing High-Pressure Acid Leaching (HPAL) technology, every 100 dollar increase in the price of sulfur raises the cost of nickel production by about 1,000 to 1,200 dollars per ton, reinforcing inflationary pressures in the market.

The sulfur market also faces additional risks due to the closure of the Strait of Hormuz, which represents about 25% of global supplies and 75% of Indonesia's imports. If the closure persists longer, it could lead to a significant decline in HPAL production, pushing nickel prices up by thousands of additional dollars per ton.

On another front, nickel inventories on the London Metal Exchange (LME) continue to decline, falling by about 4,000 tons this month following a 6,000-ton drop the previous month. This indicates that the market is approaching balance after a long period of surplus, with expectations of intensifying pressure as the year progresses.

This decline is occurring despite the fact that about 80% of global nickel production—particularly Nickel Pig Iron (NPI) and Mixed Hydroxide Precipitate (MHP)—is not delivered through the LME. However, the expansion of refining capacities in China and Indonesia has helped integrate these products into the global market.

On the demand side, stainless steel prices rose by 4% to 5% during the week, which is expected to trigger a restocking cycle across the supply chain. Since nickel is a primary component in the production cost of this type of steel, rising prices prompt buyers to increase inventories in anticipation of further hikes.

Although nickel prices have risen from approximately 14,000 dollars per ton in December to current levels, profit margins have only recently begun to recover due to high ore and intermediate product costs. This supports the sustainability of high prices rather than indicating a temporary speculative bubble.