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EMEA Oil Update: Crude Climbs 3% as Trump Warns Iran Over Hormuz Deadlock

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EMEA crude futures climbed in after-hours trading on Friday after President Trump left Beijing talks with Chinese President Xi Jinping without clear progress on reopening the Strait of Hormuz and reportedly said he is losing patience with Iran.

Brent crude futures rose by 3.34% to $109.25 per barrel, while Murban oil futures were up 2.62% to $107.44/bbl.

"Oil prices moved toward a weekly gain as the Strait of Hormuz remained effectively closed, prolonging disruptions to global energy supplies and keeping markets on edge," Soojin Kim, research analyst at MUFG, said.

On Friday, Trump said he did not push President Xi to pressure Iran to open the Hormuz, offering no sign of a breakthrough in the standoff over the key chokepoint. China is the top buyer of Iranian crude.

The US President reportedly said that he is losing patience with Iran. "I am not going to be much more patient. They should make a deal," Trump reportedly said.

"The Trump-Xi summit was held against a backdrop of a Middle East conflict that shows no signs of resolution," said Daniel Hynes, senior commodity strategist at ANZ.

Chinese FM Wang Yi reportedly said Beijing believes a solution to issues in the Strait of Hormuz "lies in achieving a permanent and comprehensive ceasefire" between the US and Iran, adding that "force cannot solve problems."

Iran has "no trust" in the US and is only interested in negotiating with Washington if it is serious, Iranian Foreign Minister Abbas Araqchi said on Friday, adding that Iran is prepared to return to fighting but also to pursue diplomatic solutions.

Meanwhile, flows through the Hormuz are easing following a ship seizure near the strategic waterway.

On Thursday, the United Kingdom Maritime Trade Operations Centre says it received a report of a vessel being "taken by unauthorized personnel" near the UAE emirate of Fujairah. UKMTO said the ship was taken 38 nautical miles off the UAE in the Gulf of Oman, where it was anchored.

The US Central Command said on Friday it has redirected 75 commercial vessels and "disabled" four as part of a blockade targeting ships entering and exiting Iranian ports.

On the supply front, the Middle East conflict has driven global oil inventories down at a record pace, and the market will remain "severely undersupplied" until October even if hostilities end next month, the International Energy Agency said on Wednesday.

The IEA said that global observed oil inventories dropped by 250 million barrels in March and April, or at a rate of about 4 million barrels per day.

OPEC also said on Wednesday that crude production among member states fell further in April and is down more than 30% since the onset of the conflict in late February. The producer group said production fell by 1.7 million b/d in April after output plunged by 7.9 million b/d in March.

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