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EMEA Oil Update: Crude Drops 4% After Iran-Israel Halt Attacks, Hormuz Transit Rises

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EMEA crude futures fell 4% in after-hours trading on Tuesday as Iran and Israel signaled a pause in hostilities, easing concerns of a wider regional conflict that had threatened to unravel peace talks and further disrupt vessel traffic through the Strait of Hormuz.

Brent crude futures tumbled 4.4% to $90.13 per barrel, while Murban crude futures were down 4.3% to $87.92/bbl.

Soojin Kim, research analyst at MUFG, said that crude edged lower after Israel and Iran signaled their intention to maintain a fragile ceasefire following a recent escalation that threatened broader efforts to end the conflict.

On Monday, President Trump reportedly said that a deal to end the Middle East conflict could be reached in two or three days, and that the Hormuz would reopen immediately after a peace deal.

Trump said that the two sides are in the final stages of a very good deal that will not allow Iran to have nuclear weapons.

His remarks followed an announcement by Iranian and Israeli officials that the two sides had halted hostilities. Iran's central military command, Khatam al-Anbiya, said on Monday that Tehran had ceased strikes against Israel, but warned it would resume hostilities if Jerusalem continues attacks on Lebanon.

Prime Minister Benjamin Netanyahu also said Israel has halted strikes for now, but said its fight against Iran and Hezbollah is not over.

Fueling bearish sentiment, US Energy Secretary Chris Wright said commercial vessel traffic and oil exports via the Strait are rising, but did not provide data on how much oil flows through Hormuz, according to media reports.

However, Kpler strategists said that transit activity via the strategic waterway remained constrained between June 5 and 7, with only eight monitored crossings for both commercial and non-commercial traffic.

The analysts said Hormuz is likely to remain open only under narrow, tightly managed conditions, and that it is moving further away from stabilizing or increasing flows.

Meanwhile, China's overseas oil purchases fell to about 7.8 million barrels per day in May, the lowest in more than eight years.

Saxo Bank analysts said China's crude oil imports fell to an eight-year low last month at 33.1 million tons, or 7.8 million b/d, as refiners increasingly drew on accumulated inventories rather than sourcing additional barrels from abroad.

The May figure marks the weakest level since October 2017, reflecting what TPH analysts described as a pullback in demand following disruptions linked to the ongoing conflict.

Global oil demand is now expected to fall by 1.1 million b/d in 2026, compared with 2025 levels of 104.0 million b/d, according to the US Energy Information Administration Short-Term Energy Outlook.

The EIA said it projected demand would recover in 2027 as supply flows normalize, with global consumption forecast to rise by 2.5 million b/d to 105.3 million b/d.

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