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EMEA Oil Update: Brent Ticks Up as Markets Weigh Iran-Oman Shipping Talks

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Brent edged up on Thursday as investors balanced ongoing diplomatic negotiations between Iran and Oman over the Strait of Hormuz against renewed supply anxiety from Houthi attacks on Saudi oil tankers.

Brent crude futures ticked up 0.2% to $79.61 per barrel, while Murban closed at $77.94/bbl on August 5 and was not trading by the time of publication of this oil price update.

SEB analysts noted "Iran has stated that it has reached an agreement with Oman on a shipping route through the Strait of Hormuz, but the US has not yet made any official comments on the proposal.

"Therefore, until a more positive development in the Middle East is confirmed, and ahead of tomorrow's important US employment data, markets have taken a wait-and-see stance," they added.

Iran's Foreign Ministry spokesperson Esmaeil Baqaei said Iran and Oman are nearing a final understanding on a commercial shipping route through the Strait of Hormuz, according to the Ministry of Foreign Affairs' Telegram post on Wednesday.

The proposed framework would grant Tehran control over ships entering the Gulf through the strait, Reuters reported citing officials familiar with the matter.

Sentiment was further complicated by renewed supply tensions following reports of Houthi missile attacks on Wednesday targeting a Saudi oil tanker off the Red Sea port of Yanbu and another in the Gulf of Aden.

On the supply side, US commercial crude oil inventories increased by 2.5 million barrels to 407 mmbbls in the week ended July 31, the Energy Information Administration said in its weekly report on Wednesday.

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