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EMEA Oil Update: Crude Falls After US Halts Iran Strike, Extends Russian Waiver

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Crude benchmarks fell on Tuesday as geopolitical risk premiums eased after US President Donald Trump announced a suspension of a scheduled military attack on Iran.

Brent crude futures fell 1.5% to $110.42 per barrel, while Murban oil futures were down 1.5% to $106.62/bbl.

Analysts noted that the sudden downward shift in market momentum was directly triggered by a Truth Social post from Trump.

"No ships have reportedly left Iran's main export terminal during the past 10 days, potentially increasing the prospects for a deal," Saxo Bank analysts said.

Meanwhile, the US extended a key sanctions waiver that expired over the weekend, authorizing the sale of stranded Russian oil currently floating at sea for an additional 30 days.

The emergency extension permits these sales until June 17. This regulatory extension will provide substantial relief to Asian refining hubs, which carry the highest structural exposure to the ongoing shipping blockade.

However, the fundamental physical landscape remains severely constrained.

Transit through the critical Strait of Hormuz, the choke point for roughly one-fifth of global oil supply, continues to operate at only a small fraction of its pre-war baseline.

The physical toll of these prolonged disruptions is already manifesting heavily in Asian downstream processing volumes.

Fresh macroeconomic data out of China underscores a sharp contraction in the domestic oil sector.

According to ING analysts, Chinese refineries processed 13.35 million barrels per day of crude oil in April.

This represents a 5.8% year-on-year decline and marks the lowest crude throughput level for the world's largest oil importer since August 2024, confirming that supply-driven bottlenecks and high import costs are actively curbing global demand, ING added.

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Oil & Energy

US Oil Update: Futures Settle Higher After Trump Says Planned Iran Attack Put on Hold

Crude futures rose in after-hours trading on Monday after President Trump called off a planned US military strike on Iran, easing immediate fears of a wider conflict in the Middle East while leaving markets cautious over the outlook for regional crude supplies.Front-month West Texas Intermediate crude futures climbed 1.74% to $107.25 per barrel, while Brent futures were up 0.41% to $109.28 /bbl."The US and Iran remained far apart on a deal to end weeks of war and reopen the crucial Strait of Hormuz, with President Trump saying the clock is ticking for Iran," Saxo Bank strategists said in a note on Monday.Trump called off a planned attack on Iran on Tuesday after the heads of three regional powers in the Middle East asked him to "hold off."The US President said the leaders of Qatar, Saudi Arabia and the US told him serious negotiations are underway with Iran that will result in a deal acceptable to Washington.However, Trump instructed the Pentagon "to be prepared to go forward with a full, large-scale assault of Iran, on a moment's notice, in the event that an acceptable deal is not reached."Iran's Deputy Foreign Minister Kazem Gharibabadi said that any possible agreement with the US must ensure an end to the ongoing conflict on all fronts and lift the blockade and sanctions imposed against the country.ING strategists said Monday that the ongoing supply disruptions mean the market has had to rely largely on inventory and, where possible, on alternative supply, including Russian crude.Fundamental differences between the US and Iran remain unresolved, with Tehran demanding the return of frozen assets to the Iranian people and dismissing Washington's nuclear demands as political excuses.On the supply front, the International Energy Agency executive director, Fatih Birol, said on Monday that commercial oil inventories were depleting rapidly, with only a few weeks' worth left due to the ongoing Middle East conflict and the closure of the Hormuz.Birol, who is participating in the Group of Seven finance leaders meeting in Paris, told reporters that the release of strategic oil reserves had added 2.5 million barrels of oil per day to the market, but said these reserves "are not endless."Meanwhile, Kpler said the US downstream operations are running at full capacity as refiners respond to tightening global fuel balances and surging export demand.Refinery utilization is averaging almost 93%, supported by strong distillate and gasoline margins, lighter maintenance schedules, and rising reliance on Atlantic Basin supply, Kpler strategists said in a note on Monday.Though a fragile ceasefire was reached in April, tensions between Iran and the US continue, with Tehran keeping the Hormuz closed, while Washington continues to blockade Iranian ports.On Monday, Iran unveiled a new body, the Persian Gulf Strait Affairs Authority, to oversee activities related to the Strait.

Oil & Energy

Cape of Good Hope Share of US-Asia LPG Voyages Hits Highest Since 2016, Vortexa Says

The Cape of Good Hope captured about 43% of US-Asia liquefied petroleum gas voyages in April 2026, reaching its highest level since October 2016, according to a Vortexa note on Monday.Vortexa strategists attributed the surge to high Panama Canal auction prices and Argus data showing that unbooked waiting times have soared.The surge in ton-miles is tightening Very Large Gas Carrier supply and boosting freight rates on the Baltic US Gulf-to-Japan route, according to Vortexa, which expects this tightness to intensify through early June amid longer voyage times that delay vessel returns.Vortexa said VLGCs and Very Large Ethane Carriers appear to display "business-as-usual" behavior in the Panama Canal. The number of VLGCs and VLECs waiting at the North Panama waypoint, along with daily southbound transit volumes, remained moderate in early May 2026 and did not increase.However, oil tanker deployments show a markedly different trend. The four-week moving average of oil tankers waiting rose from 25 in the week ending March 1, before the Hormuz crisis, to 45 by mid-April, a record high in Vortexa's 10-year dataset.Spot cargoes sailing through the Panama Canal without a pre-booked transit slot incur extra costs that have become "prohibitive," Vortexa said.Additionally, compliance requirements for vessels sailing through the Panama Canal have added to the squeeze.This has pushed shippers to increasingly view the Cape of Good Hope as a more favorable rerouting option than the Panama Canal.Waypoint entry data for the Cape of Good Hope showed a similar pattern.US-Asia LPG voyage counts through the Cape of Good Hope hit record highs in the week of May 4-10, Vortexa data revealed.About 43% of US Gulf Coast LPG voyages bound for Asia transited via the Cape of Good Hope, the highest since October 2016, when the share reached 48%, and a sharp rise from 34% in February.Vortexa described the ton-mile impact as "significant."For comparison, Vortexa said a laden VLGC sailing at 15 knots on the Houston-Chiba route takes about 26 days, compared with 45 days via the Cape route, adding about 76% per laden voyage and thereby tightening vessel availability.This vessel supply squeeze could also be traced in fleet distribution data. "Since the Strait of Hormuz crisis began, ballast VLGCs/VLECs had consistently outnumbered laden vessels, reversing the normal pattern," Vortexa said.This trend surpassed the ballast-to-laden pattern seen from February to March 2020 during the Covid-19 pandemic.As of early May 2026, laden VLGCs and VLECs outpaced ballast vessels for the first time since the conflict began.This indicates that the surplus of idle tonnage repositioning westward has been absorbed, according to the note.With Middle East Gulf loadings subdued amid the ongoing conflict, Houston-Chiba freight rates are facing "sustained upward pressure."Vessel availability in the US Gulf Coast will remain reduced from late May through early June amid record-high ton-mile freight rates on the US-Asia route and potential return delays.Atlantic Basin LPG imports have remained robust through May."For market participants trading on the USGC-to-Asia route, the combination of higher tonne-miles, freight rates, and elevated feedstock prices falls hardest on spot cargoes destined for Northeast Asian petrochemical players, especially Chinese buyers now increasingly shifting from term contracts to spot buying," Vortexa said.However, longer voyages around the Cape also introduce timing risks.For instance, a cargo loaded around mid-May is not likely to arrive until late June or early July. By then, volatile downstream margins could have deteriorated."The risk of arriving in a weaker market erodes the economics of a trade that looked profitable at the point of loading, and that risk grows with every additional day at sea, even before factoring in potential demurrage," the analysis said.Demurrage is a shipping-related penalty imposed when cargo or containers are detained in a port or related infrastructure beyond their allotted time.This will result in Asian petrochemical buyers facing a window of "persistent" margin pressure before the market corrects course.

Oil & Energy

Middle East Conflict Could Push Asia Towards Coal, Renewables, Wood Mackenzie Says

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