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EMEA Oil Update: Crude Jumps as Trump Plans to Hit Iran, Mideast Hostilities Flare

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EMEA crude futures rallied in after-hours trading on Wednesday, reversing earlier losses, as escalating Middle East hostilities and President Trump's threats of military action against Iran reignited fears of global supply disruptions.

Brent crude futures jumped by 7.2% to $90.09 per barrel, while Murban crude futures advanced by 2.3% to $86.00/bbl.

Soojin Kim, research analyst at MUFG, said that Brent crude rose, recovering part of its recent losses after renewed military exchanges between Iran, the US and regional allies reignited concerns over energy supply disruptions.

Trump reportedly said that Iran "is going to get a beating" after the Islamic Revolutionary Guard Corps launched ballistic missiles at US military.

The US President's remarks follow reports that the IRGC targeted a US airbase and command center in Jordan with ballistic missiles, as Middle East hostilities escalate after a recent pause in hostilities.

Iranian media also said the US had attacked part of the country's territory.

On Tuesday, US and Saudi forces struck "multiple terrorist logistics and weapons sites" in eastern Iraq, in retaliation for more than 30 drone attacks in the past three days by "Iran-aligned terrorists."

Earlier on Tuesday, Saudi Arabia's Defense Ministry said that drones launched from Iraq by "Iran-affiliated terrorist militias" attempted to target petroleum facilities in the Gulf state.

The US sanctioned two Iranian companies that charge for safe passage through the Strait of Hormuz and eight tankers linked to Iranian oil exports on Wednesday, accusing the Islamic Revolutionary Guard Corps-backed network of operating an extortion scheme.

Treasury's Office of Foreign Assets Control said the sanctions target the Persian Gulf Marine Insurance Company and HormuzSafe Marine Services Authority, which allegedly force vessels to buy mandatory maritime "insurance" to transit Hormuz.

Meanwhile, Iran ruled out Oman's proposal for regional joint management of the strategic waterway, as Yemen's Houthis are also considering imposing fees on commercial ships transiting through the southern Red Sea, according to media reports.

Gelber & Associates strategists said that irreconcilable differences over commercial transit rights and sovereignty in the Strait quickly restored the geopolitical risk premium, while renewed Houthi attacks on Red Sea shipping reinforced expectations of tighter physical balances.

Traffic through the Middle East energy chokepoints remains restricted, with Kpler data showing 12 and 41 confirmed crossings in the Hormuz and Bab el-Mandeb on 28 July, respectively. The US Central Command said it has redirected 18 commercial vessels, disabled 2, and boarded 2 as of July 28.

On the supply front, US commercial crude oil inventories decreased by 7.2 million barrels to 404.5 mmbbls in the week ended July 24, the Energy Information Administration said in its weekly report on Wednesday.

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EMEA Oil Update: Crude Jumps as Trump Plans to Hit Iran, Mideast Hostilities Flare | FINWIRES