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EMEA Oil Update: Crude Heads For Weekly Gain as Iran, Ukraine Conflicts Fuel Supply Concerns

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(We now track Dubai First Line futures as Adnoc phases out Murban)

EMEA crude futures slipped in after-hours trading on Friday but remained on track for their biggest weekly gain since mid-July as renewed US-Iran hostilities and attacks on Russian energy infrastructure heightened supply distribution concerns.

Brent crude futures eased 0.1% to $95.37 per barrel, while Dubai 1st Line Futures were up 0.3% to $89.09/bbl.

Soojin Kim, research analyst at MUFG, said oil headed for its strongest weekly gain since July as renewed US-Iran hostilities revived concerns over prolonged disruption to energy flows via the Strait of Hormuz.

Iran's military said on Thursday it targeted US bases in Kuwait and the UAE, the state-run Tasnim News Agency reported. Kuwait said it responded to missile and drone threats, but the UAE hasn't announced any incidents.

US attacks earlier this week that killed and wounded dozens marked the fiercest clashes between Tehran and Washington since July. Israel also signaled preparedness to return to fighting if necessary, fueling concerns that the ongoing conflict could widen, according to media reports.

Meanwhile, Trump's envoys Steve Witkoff and Jared Kushner are set to travel to Moscow and Kyiv this weekend for talks aimed at ending the war, according to media reports. Ukrainian drone strikes on Russian energy infrastructure have squeezed global energy supplies in the recent past.

On the supply front, Trump administration officials have said that Middle Eastern oil flows have returned to near-normal levels in recent weeks. Energy Secretary Chris Wright reportedly said on Wednesday that a record 17 million barrels of oil transited the Hormuz on Monday under US military protection.

Saxo Bank strategists said that the US-Iran conflict continues to keep supply risks and the geopolitical risk premium elevated, while refined products such as diesel have seen even steeper gains amid Hormuz-related supply disruptions and the Russia-Ukraine war.

On the demand front, the price of diesel fuel hit a record Friday, as truckers in the US are paying an average of $5.85 per gallon nationwide, a 60% increase compared to the same period a year ago when diesel cost $3.71 per gallon.

ING strategists said that unless Persian Gulf and/or Russian diesel flows recover, the market is likely to tighten further as we head towards winter.

Going forward, market participants will be closely following OPEC+'s meeting on Sunday, where the producer group is expected to leave its oil output policy unchanged for October as it completes the rollback of a tranche of production cuts and shifts its focus toward negotiating 2027 quotas.

OPEC+ is likely to favor higher output, Bjarne Schieldrop, chief commodities analyst at SEB Research, said, adding that the prospect of further managed supply increases by the producer group adds to downside risks for oil prices in 2027/28.

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