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EMEA Oil Update: Crude Ease Towards Weekly Loss on Supply Recovery Hopes

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Crude oil prices declined on Friday, headed for weekly losses as early signs of recovering Persian Gulf supply eased market jitters.

The Brent futures contracts fell 1.6% to $87.62 per barrel. Murban futures declined more than 3% to $82.95/bbl. Both contracts were headed for weekly losses.

"Oil prices eased despite US-Iran tensions remaining elevated, helped by early indications that Persian Gulf supply is beginning to recover," ING analysts said.

US Energy Secretary Chris Wright said the US military had been escorting oil and gas shipments through the Strait of Hormuz, with about 6.5 million barrels of oil per day exiting the Gulf via the strait over the past week, Bloomberg reported Thursday.

A US Department of Energy spokesperson confirmed toin an emailed response that the 6.5 million b/d figure reflects the recent seven-day rolling average as of Wednesday.

Saxo Bank analysts noted that crude prices consolidated lower ahead of the weekend, pressured by Donald Trump's announcement of a prospective deal for the full disarmament of Hamas and other armed groups in Gaza, which would place the territory under a new Palestinian government.

On Thursday, the Saudi Defense Ministry reported that over 40 nations convened to discuss strengthening maritime defense cooperation to secure critical sea lanes, a move precipitated by Houthi declarations of a maritime embargo against Saudi Arabia and persistent Iranian attacks on commercial vessels in the Strait of Hormuz.

Meanwhile, Pakistani Foreign Ministry spokesperson Tahir Andrabi stated that US-Iran peace negotiations are ongoing to restore stability to the waterway.

On the regulatory front, the US Department of the Treasury's Office of Foreign Assets Control sanctioned six entities and individuals across China, India, Russia, and Iran for supporting Mahan Air and the Islamic Revolutionary Guard Corps.

Physical supply disruptions also added volatility to product and regional markets.

Global middle distillate margins climbed to fresh highs after renewed Middle East conflicts tightened diesel availability heading into winter, according to Vortexa analyst Pamela Munger.

Simultaneously, the Caspian Pipeline Consortium suspended oil loadings at its Black Sea export terminal on Thursday following Ukrainian drone strikes targeting a vessel loading at the facility.

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