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EMEA Oil Update: Crude Gains as Markets Weigh Iran-Oman to Reopen Strait of Hormuz

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EMEA crude futures climbed more than 3% in after-hours trading on Monday after Iran said a deal with Oman on shipping routes would not by itself lead to the resumption of full traffic through the Strait of Hormuz.

Brent crude futures rose 3.6% to $86.57 per barrel, while Murban closed at $80.25/bbl on Aug. 7 and was not trading by the time of publication of this oil price update.

Soojin Kim, research analyst at MUFG, said that crude extended gains as Iran and Oman remained short of an agreement to restore normal shipping through the Hormuz.

Iran's Foreign Ministry spokesman, Esmaeil Baqaei, said Monday that the US must lift its blockade before Tehran would agree to fully open Hormuz. Baqaei said that as long as the US naval blockade of Iranian ports continues, the necessary conditions for the reopening of the strategic waterway do not exist.

He said Iran and Oman are holding bilateral negotiations over shipping routes in the strait, noting that the talks "are naturally a bilateral matter involving the two coastal states".

Iranian Foreign Minister Abbas Araqchi also said on Sunday that Iran and the US are not currently engaged in talks. "We have no negotiations with America; until America compensates for the violations committed, there is no possibility of resuming talks," Araqchi said.

President Trump reportedly said that the US is "only semi-negotiating" with Iran, after he insisted last week that the two sides were in fact holding talks. Trump signaled he's prepared to let economic pressure on Iran build rather than launch fresh military strikes to force a reopening of the strategic waterway.

SEB Research strategists said that the Iranian conflict and the high energy prices are impacting Trump's popularity, thus increasing pressure on the US to reach an agreement ahead of the midterm elections.

Fueling bullish sentiment, strikes across the region and in the Hormuz have also kept the market on edge. On Saturday, the UAE condemned an Iranian attack on a carrier linked to the country's state energy giant Adnoc Group while transiting the Hormuz.

On Sunday, Yemen's Houthis attacked Saudi Arabia's Jazan refinery, further adding strain to an already tight global diesel market, as disruptions to shipments through Hormuz deepen the impact of Russia's fuel export ban.

Saxo Bank strategists said that the risk of renewed Middle East escalation remains elevated, but the muted price response highlights competing headwinds from weak Chinese demand and the release of emergency reserves.

Traffic through the Middle East energy chokepoints diverged over the weekend, with Kpler data showing 32 confirmed crossings in the Hormuz between Aug. 7 and 9, while crossings via Bab el-Mandeb held steady at 116 confirmed crossings over the same period.

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