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EMEA Oil Update: Crude Futures Nudge Down Amid Khor Mor Shutdown

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Oil benchmarks were down slightly despite intensifying US-Iran military exchanges and the suspension of production at the Khor Mor gas field trigger supply fears.

Front-month Murban crude futures slipped 0.3% to $77.51 per barrel with the contract adding more than 9% on a week-over-week basis. Brent futures eased 0.1% to $84.11/bb but gained more than 10% so far this week.

Markets remain highly reactive to the worsening conflict between the US and Iran, characterized by a series of ongoing military strikes and counter-attacks, analysts noted.

"The exchange of attacks has raised concerns about supplies, with rising energy prices as observable commercial traffic through the Strait of Hormuz slumps," Saxo Bank analysts said.

US Central Command reported that its forces have engaged in six consecutive nights of strikes aimed at degrading Iranian military capabilities, while Iran has responded by targeting US military sites in Bahrain, Jordan, and Kuwait.

"At the Commander in Chief's direction, [Centcom] is further degrading Iranian military capabilities and holding Iran accountable for recent attacks on commercial shipping," US Centcom posted on X.

The security landscape for energy infrastructure has deteriorated sharply, most notably in Iraq.

UAE-based Dana Gas PJSC, operator of the Khor Mor gas field, confirmed the suspension of its main production facilities due to credible security threats.

"Dana Gas (PJSC) informs the market that due to credible security threats and the escalation in the region, Khor Mor main production facilities are being shut down," the company noted.

Meanwhile, Iran has reportedly directed Houthi proxies in Yemen to prepare for potential operations against Red Sea shipping routes should the US extend its military campaign to Iranian energy infrastructure.

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