EMEA crude futures climbed in after-hours trading on Friday as persistent security risks in the Strait of Hormuz and uncertainty surrounding Iran-Oman talks to open the strategic waterway kept markets on edge.
Brent crude futures rose 1.4% to $83.61 per barrel, while Murban crude futures advanced by 1.9% to $81.10/bbl.
Saxo Bank strategists said that despite the two-day rebound, crude remains down about 5% on the week, having sold off earlier on expectations of a US-Iran accord.
UAE's Adnoc said on Friday that three of its vessels were attacked while transiting Hormuz this week, bringing the total number of its vessels targeted since the conflict began to 15.
On Thursday, Iran's speaker of Parliament Mohammad Baqer Qalibaf accused President Trump of staging "theater diplomacy," as Washington and Tehran offer conflicting accounts of bilateral engagement aimed at ending their monthslong hostilities.
"Massive attack coming... wait, never mind, they want to negotiate.' That's theater diplomacy on loop," Qalibaf said.
Two explosions were reportedly heard on Iran's southern Qeshm Island in Hormozgan province Thursday night as a result of the Iranian armed forces' confrontation with "hostile enemy targets" at the entrance to the Hormuz.
Meanwhile, Iran and Oman are working on an agreement to define transit routes through the Strait.
An Iranian lawmaker reportedly said a parliament committee is reviewing a preliminary bill to ban US, Israeli and other vessels deemed hostile from the Hormuz, and fine violators of the proposed restrictions up to a fifth of cargo value.
The plan, according to local media reports, would also bar Israeli cargo and related vessels. The restrictions will extend to "countries and individuals that have caused damage to Iran" until that harm is "compensated."
"The structure of the Iran-Oman agreement in its current form and the power it yields to Iran is nothing that Trump can accept politically," Bjarne Schieldrop, chief commodities analyst at SEB Research, said, adding that the US President's options are shrinking.
The Middle East conflict appears to be widening after Yemen's Houthis attacked a Saudi oil tanker, the Wafa, in the northern Red Sea off the coast of Yanbu on Wednesday. The Iran-aligned militant group plans to expand operations into the northern Red Sea after alleging that Saudi tankers had begun rerouting away from the Bab el-Mandeb Strait.
Traffic through the Middle East energy chokepoints diverged, with Kpler data showing 8 confirmed crossings in the Hormuz, down 33%, while crossings via Bab el-Mandeb rose 18% to 26.
ING strategists said that flows via the Hormuz will start to normalise through Q3, while forecasting Brent prices to average $80/bbl this quarter. "However, there's plenty of risk and uncertainty to this view," the analysts said.