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EMEA Oil Update: Crude Falls on US-Iran Talks Optimism Ahead of Araghchi Visit

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EMEA crude futures dropped in after-hours trading on Friday, reversing earlier gains as market optimism grew over the potential resumption of peace talks between the US and Iran, amid reports that Iranian Foreign Minister Abbas Araghchi will arrive in Pakistan for indirect talks.

Brent crude futures eased by 0.38% to $104.67 per barrel, while Murban oil futures were down 1.74% to $104.11/bbl.

Ole R. Hvalbye, commodities analyst at SEB Research, said that the current Iranian leadership is dominated by genuine hardliners willing to absorb economic pain and run the clock to extract concessions. "That is not a setup for a rapid resolution," Hvalbye said.

Though Iranian media said that no talks with the US would take place during Araghchi's visit, the top diplomat is set to arrive in Islamabad on Friday as Pakistan continues to try to broker negotiations between the two sides over a conflict that has roiled global energy markets.

"Embarking on a timely tour of Islamabad, Muscat, and Moscow. The purpose of my visits is to closely coordinate with our partners on bilateral matters and consult on regional developments," Araghchi said in a social media post on X.

President Trump is reportedly sending US peace envoy Steve Witkoff and Jared Kushner to Pakistan for talks with Araghchi.

Elsewhere, Israel and Lebanon agreed to extend their ceasefire by three weeks following a White House meeting with senior US officials, President Trump said on Thursday.

Though the ceasefire between the US and Iran has held, the Middle East conflict has evolved into naval blockades keeping the Strait of Hormuz closed.

On Thursday, Trump ordered the US Navy to "shoot and kill" boats laying mines in the Hormuz, while claiming that Washington now has "total control" over the passage.

Saxo Bank strategists said the disruption in the Hormuz threatens to further delay crude and fuel flows from the Arabian Gulf.

"Even a full reopening may still leave flows taking several months to normalize, creating additional tightness, especially in diesel and jet fuel, and forcing countries and companies to curb demand," the analysts said.

The Hormuz has come to a near halt as tensions between the US and Iran flared up over the strategic waterway this week, prolonging the global oil supply disruption.

MarineTraffic said Hormuz traffic remains constrained, with eight crossings recorded on Apr.23, flat day-over-day and far below typical volumes.

"While no new attacks have occurred since Apr. 22, risks remain elevated for the 702 vessels still in the Persian Gulf, amid threats of Iranian action, US interdiction and persistent mine hazards," the shipping tracking data firm said.

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