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EMEA Oil Update: Crude Retreats on Iran Proposal for Renewed Peace Talks

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-- EMEA crude futures retreated in after-hours trading on Friday, pressured by reports that Iran had floated a new proposal to restart peace talks, raising expectations that heightened tensions with the US could de-escalate and potentially ease supply risks.

Brent crude futures dropped by 2.03% to $108.09 per barrel, while Murban oil futures were down 3.70% to $107.02/bbl.

Saxo Bank strategists said that Thursday's sharp reversal underscored a market "taking the stairs up but risks the elevator down on any sudden easing headline, making conditions exceptionally challenging for traders."

Iran sent its latest proposal for negotiations with the US to Pakistani mediators on Thursday, according to media, as President Trump vowed to maintain the blockade of Iranian ports amid behind-the-scenes diplomacy to end the Middle East conflict.

US envoy Steve Witkoff reportedly sent a list of amendments on Monday to reinsert the nuclear issue into the agreement under discussion, with one of the amendments demanding that Iran commit to not attempting to move any enriched uranium.

Tensions between the US and Iran remain elevated despite a ceasefire. On Wednesday, the US Central Command had prepared a plan for a "short and powerful" wave of strikes on Iran in hopes of breaking stalled talks with the US.

Meanwhile, Iranian authorities have vowed to respond with "long and painful strikes" on US positions if Washington renews attacks, while reasserting control over the Hormuz.

Iran's Parliament Speaker Mohammad Bagher Ghalibaf and other Iranian officials reportedly said the US blockade, which they insist must be lifted for the sides to resume peace talks and for Hormuz to be reopened, will further push up oil prices.

Meanwhile, the US Department of the Treasury said on Friday that it could sanction vessels that pay tolls to Iran for safe transit through the Strait of Hormuz, even if those payments are made as charitable donations to Iranian NGOs.

The Department said Iranian demands for toll payments may include fiat currency, digital assets, offsets, informal swaps, or charitable donations made to the Iranian Red Crescent Society, Bonyad Mostazafan, or Iranian embassy accounts.

Traffic through the Hormuz was cut by half on April 30 to seven crossings from the previous day, with traffic split between four commercial and three non-commercial movements, according to Kpler.

On the supply front, OPEC+ is expected to agree on another symbolic production increase of 188,000 barrels per day for June, in the group's first move following the UAE's surprise departure.

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