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EMEA Oil Update: Crude Gains as US-Iran Standoff Over Hormuz Continues

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EMEA crude futures rose in early Wednesday trade as the deadlock between US and Iran continued over the reopening of the vital Strait of Hormuz waterway.

Brent crude futures were up 0.88% to $89.69 per barrel, while Murban crude futures were last seen up 0.2% at $89.28/bbl and were not trading at the time of publication of this update.

Oil prices gained rose as hopes of a deal to reopen the Strait of Hormuz remained low, Daniel Hynes, a senior commodity strategist at ANZ said in a note.

"The collapse of the US-Iran peace deal has seen oil flows from the Persian Gulf once again dry up. The Strait of Hormuz remains heavily constrained, with vessel traffic showing no meaningful recovery," Hynes said.

The number of vessels passing through the Strait of Hormuz fell to a one-week low of eight on Tuesday as shipowners avoided the key route amid ongoing Middle East tensions, Reuters reported Wednesday, citing Kpler data.

On Tuesday, Pakistan's Defense Minister Khawaja Asif reportedly said that the US and Iran are "close to some sort of arrangement" on the Strait as talks between Oman and Iran over shipping routes in the strategic waterway are said to have also reached an advanced stage.

However, Iran reportedly said it would keep the crucial waterway closed until the US lifts the blockade on its ports and compensates for damage from their attacks.

According to multiple media reports, US President Donald Trump on Tuesday said that US had "total control" of the Hormuz waterway, which accounts for 20% of the global energy flows. Trump further said that he did not trust Iran, accusing it of repeatedly lying to him, and warned that the country would be "blown away" if it challenged the US.

Meanwhile, Middle East tensions kept traders cautious after a US Navy helicopter fired missiles at a Panama-flagged cargo ship in the Gulf of Oman and a drone attack targeted a refinery in Libya, Hynes said.

"By this point, you'd think markets would be largely immune to headlines about a US-Iran deal. The pattern keeps repeating - initial enthusiasm when negotiations appear promising, only for that optimism to dissipate just as quickly. Yet the oil market remains very headline-driven, which leaves prices whipsawing," research firm ING said in a note on Tuesday.

"The latest bout of optimism is quickly fading.... Current rhetoric suggests any potential deal is still some way off, meaning risks remain skewed to the upside for oil prices," it added.

The US Energy Information Administration expects Brent crude prices to remain elevated through 2026 as disruptions in the Strait of Hormuz weigh on global oil flows and inventories, according to its August Short-Term Energy Outlook on Tuesday.

The EIA expects Brent to average about $85/bbl in Q3 2026, $11/bbl above its previous forecast, before declining to $78/bbl in Q4 2026 as oil flows recover.

The EIA estimates crude oil and petroleum liquids through Hormuz averaged 4.9 million barrels per day in 2Q26, down from 21.6 million b/d in 4Q25 before the conflict.

Meanwhile, flows through Bab el-Mandeb averaged 8.1 million b/d in 2Q26, up from 5.4 million b/d in Q4 2025 as Saudi Arabia redirected crude through the East-West pipeline to Yanbu.

Global oil inventories fell by an average of 4.2 million b/d in Q2 2026, and the EIA expects inventories to decline by another 3.8 million b/d on average in Q3 2026.

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