FINWIRES · TerminalLIVE
FINWIRES

EMEA Oil Update: Brent Steady Amid Rising Middle East Tensions, Stalled Deal Talks

By

Brent crude oil futures held steady on Monday as markets braced for the expiration of the US-Iran ceasefire amid escalating vessel attacks in the Strait of Hormuz.

Brent futures eased 0.1% to $88.42 per barrel, while Murban crude futures closed at $89.42/bbl and were not trading at the time of publication of this update.

"Crude trades steady, holding onto its geopolitical bid, with Brent near the top of its recent range near $89 as fresh fighting in Lebanon and attacks on vessels in the Strait of Hormuz cloud the outlook for a deal to end the US-Iran war," Saxo Bank analysts said.

Sentiment remains heavily shaped by regional conflict, highlighted by the deadliest day of fighting in Lebanon in months following Israeli strikes on Hezbollah targets in the south, complicating broader paths toward a diplomatic resolution, Commerzbank analysts noted.

Commerzbank analysts added that the dominant driver heading into the Asian open is the expiration of the US-Iran ceasefire agreement, with bilateral negotiations currently at a standstill and Washington preparing fresh sanctions.

Geopolitical frictions deepened around vital shipping chokepoints. US President Donald Trump stated on Friday that he would soon declare the Strait of Hormuz a US territory, addressing crowds on Long Island, New York.

Meanwhile, Iran's army chief said that the chokepoint a "God-given geopolitical asset" essential for ending the ongoing conflict, signaling Tehran's intention to maintain strategic leverage, analysts noted.

Physical disruptions continued to mount over the weekend. A bulk carrier was reportedly struck by a projectile, and multiple vessels belonging to a major Abu Dhabi energy company were hit in separate incidents within the Strait of Hormuz.

Global oil benchmarks logged weekly gains on Friday as persistent Middle East supply risks and Strait of Hormuz bottlenecks overshadowed bearish demand revisions.

Related Articles

Oil & Energy

Trump Says Strait of Hormuz to be Declared US Territory 'Pretty Soon'

US President Donald Trump said Friday that he would soon declare the Strait of Hormuz US territory, as tensions remained elevated over the critical waterway."Pretty soon I'll be declaring the Hormuz Strait a territory of the United States," Trump said.Trump made the remarks during a speech on Long Island, New York on Friday.The US President described the naval blockade as "unstoppable" and a "wall of steel.""No ships get through unless we want them to," he said.Trump defended US actions in the Middle East, saying US citizens may have to pay somewhat more for gasoline as a result of the conflict."I just say this. So for you to pay a tiny little bit more for your gasoline, just remember you're doing it so that a very evil country cannot have a country," Trump said, reiterating his stance that Iran can never have a nuclear weapon.Iran's Deputy Foreign Minister for Legal and International Affairs Kazem Gharibabadi responded to Trump's comments in a post on X."The Strait of Hormuz cannot be seized by tweet, nor by aircraft carrier, nor by issuing an order, nor by an election speech. Iran neither fears threats nor cowers before displays of power," Gharibabadi said.

Oil & Energy

Oil Posts Weekly Rise as Geopolitical Risks Offset Bearish Demand Outlook

Global oil benchmarks logged weekly gains on Friday as persistent Middle East supply risks and Strait of Hormuz bottlenecks overshadowed bearish demand revisions.West Texas Intermediate settled at $82.40 per barrel, up from $77.08/bbl the previous week, while Brent closed at $88.73/bbl, up from $82.35/bbl a week earlier.The rebound broke a two-week losing streak as markets navigated a tug-of-war between enduring Middle East supply threats and mounting downward pressures from weak global demand and higher US crude stockpiles.Supply anxieties intensified following a wave of regional security incidents.The Abu Dhabi National Oil Company reported that two of its vessels were attacked while trying to cross the Strait of Hormuz, while Houthi drone strikes targeted Saudi Aramco's Jazan refinery on the Red Sea coast.Furthermore, stalled diplomatic talks between the US and Iran, compounded by mutual demands for financial compensation and ongoing naval blockades, left the critical Hormuz waterway effectively restricted.Analysts noted that while alternative bypass pipelines and modest traffic increases have helped partial flows, persistent disruptions continue to command a heavy risk premium."Oil prices are currently being pulled in two opposing directions: supply risks in the Middle East continue to provide support, while weakening global demand, a sharp increase in US crude inventories, and the prospect of higher OPEC+ production are exerting downward pressure," said Linh Tran, Market Analyst at XS.comOn the demand side, major energy agencies delivered sharply bearish revisions.OPEC lowered its global oil demand growth forecast for 2026 to 600,000 barrels per day in its monthly oil market report.Simultaneously, the International Energy Agency projected that global consumption would contract by 1.6 million barrels per day this year, a steeper drop than previously estimated as elevated prices and regional supply bottlenecks weigh heavily on usage.Meanwhile, domestic US supply metrics added to the market's complexity.The Energy Information Administration reported that US commercial crude inventories surged by 17.4 million barrels to 424.4 million barrels in the week ended Aug. 7, marking the largest weekly build since 2023 and driven largely by a jump in imports and a slowdown in exports.However, analysts pointed out that steep draws in refined products such as gasoline and diesel signaled tighter global product markets.Looking ahead, the EIA's latest Short-Term Energy Outlook expects US crude inventories to remain below the five-year low through the end of 2026.Due to ongoing constraints in the Strait of Hormuz, the EIA forecasts Brent spot prices to average around $85/bbl in Q3 of 2026.The US oil rig count increased by one from 454 the previous week to 455 in the week ending Aug. 14, according to data from Baker Hughes (BKR) released Friday. The US had 412 oil rigs in operation a year earlier.The consolidated North American oil and gas rig count, a key early indicator of future production levels, increased by eight to 812 from 804 the previous week.Money managers in the WTI crude futures and options markets maintained their net long positions in the week ended Aug. 11, according to the Commodity Futures Trading Commission's latest Commitments of Traders report released on Friday.

$BKR
Oil & Energy

US Oil Update: Crude Settles Higher as US Threatens Economic Isolation of Iran

Crude futures settled higher in after-hours trading on Friday after the US said its naval blockade of Iranian ports could continue "indefinitely" and Adnoc vessels were attacked in the Strait of Hormuz, reigniting concerns over global supply disruption.Front-month West Texas Intermediate crude futures rose by 1.4% to $82.40 per barrel, while Brent futures advanced 2% to $88.80/bbl.Gelber & Associates strategists said that prices found support after the US threatened to maintain its naval blockade of Iran indefinitely, while tanker attacks and reduced traffic through the Hormuz kept immediate supply risks elevated.Treasury Secretary Scott Bessent said on Friday that the US would announce additional measures next week, describing them as economic actions on a scale not previously seen, according to media reports.Bessent said the US will continue its naval blockade of Iran's ports, part of Washington's pressure campaign to push Tehran to reopen the Hormuz.Defense Secretary Pete Hegseth reportedly said on Thursday that the US military had the capacity to sustain its naval presence in the region indefinitely.Saxo Bank strategists said the absence of fresh escalation around the still-closed Hormuz, combined with the previous week's very large US inventory build, has encouraged some profit-taking.Fueling bullish sentiment, the UAE said late on Thursday that Iran attacked two vessels linked to state-owned energy giant Adnoc Group, which were transiting the Hormuz.Iran's Islamic Revolutionary Guard Corps said on Friday that the Strait remains closed, dismissing US claims about the level of maritime and oil traffic through the strategic waterway.Ali Ozamaei, the commander of the IRGC Navy, said the Strait of Hormuz is closed and that Iranian forces maintain firm control over activity in the waterway, according to Iranian state media.Tensions around the Middle East energy chokepoints remain elevated on Aug. 1, though the number of confirmed crossings increased, with Hormuz recording 13 crossings, up 44% day on day, while Bab el-Mandeb traffic rose 4% to 29 crossings.Meanwhile, two slicks have appeared in Iranian waters, as tit-for-tat attacks on oil tankers and other vessels by Iran and the US stoked concern about environmental damage to the Gulf, according to multiple media reports.UK-based maritime risk and response firm Ambrey said it has been hired to salvage a grounded Russian shadow fleet tanker off Oman's coast and to stop an oil spill that threatens wildlife, according to multiple media reports.While the threat to crude supplies has kept a floor under oil prices, concerns over global demand have capped the gains. US crude stocks rose by about 17.4 million barrels to 424.4 mmbbls in the week ended Aug. 7, according to the EIA, adding to bearish sentiment.