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EMEA Oil Update: Crude Climbs After US Strikes on Iran Cloud Peace Prospects

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EMEA crude futures rose in after-hours trading on Tuesday as renewed US strikes on Iran dampened market optimism that a resolution to the three-month-old conflict was imminent.

Brent crude futures gained 4.12% to $100.08 per barrel, while Murban oil futures advanced 3.42% to $95.99/bbl.

Brent closed 6% lower on Monday, amid expectations that the US and Iran would soon reach a deal.

Saxo Bank strategists said crude prices rebounded after renewed US military activity in southern Iran and the Strait of Hormuz partially reversed Monday's sharp decline.

On Tuesday, the US Central Command said its forces "conducted self-defense strikes in southern Iran," targeting vessels allegedly trying to deploy mines, as well as missile launch locations. Centcom said the actions were intended "to protect our troops from threats posed by Iranian forces."

Iran's Islamic Revolutionary Guard vowed to retaliate against violations of the ceasefire after it identified and engaged US drones and an F-35 jet fighter that entered the country's airspace.

Tehran said Washington had violated the ceasefire after the defensive strikes in southern Iran, as Secretary of State Marco Rubio said that negotiating a peace deal could "take a few days".

Iran's Foreign Ministry condemned the US attacks as a violation of a ceasefire that's been in place since early April, while Supreme Leader Mojtaba Khamenei said that the "nations and lands of the region will no longer be a shield for American bases."

"Without any doubt, the Islamic Republic of Iran will leave no act of aggression unanswered and will show not the slightest hesitation in defending the sovereignty and territorial integrity of Iran," the Foreign Ministry said in a statement.

ING strategists said President Trump suggested over the weekend that progress has been made on a deal to end the Middle East conflict, but "we've been at this stage before, only for talks to break down".

The US strikes came hours after President Trump said negotiations with Iran to extend their ceasefire and reopen the Strait of Hormuz are proceeding.

Meanwhile, China's crude oil imports have slumped to their lowest level since 2016, a sharp decline that has unexpectedly eased feedstock supply constraints across the rest of Asia, according to Kpler.

Kpler strategists said imports into China are currently tracking at about 6.6 million barrels per day for May. The analysts said the resulting surplus has redirected volumes from the Middle East, Russia, Africa, and the Atlantic Basin to other regional refiners.

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