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EMEA Oil Update: Crude Rise as Middle East Crisis Escalates, Hormuz Traffic Slows

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EMEA crude futures held steady in after-hours trading on Wednesday as escalating tensions in the Middle East and a slowdown in shipping through the Strait of Hormuz heightened concerns about disruptions to crude supplies.

Brent crude futures rose 1.5% to $92.47 per barrel, while Murban crude futures were up 0.8% to $98.49/bbl.

ING strategists said crude prices extended gains for a fourth consecutive session on Wednesday, as uncertainty over a resolution of the US-Iran conflict continued to support risk premiums.

On Wednesday, the UAE severed all economic ties with Iran after accusing Tehran of firing ballistic missiles at its territory, ramping up regional tensions.

The Gulf state, one of Iran's main trading partners, said it halted trade and financial transactions until further notice in light of "escalations that undermine regional and international peace and security."

Iranian Foreign Ministry spokesman Esmail Baghaei denied responsibility for the attack, saying that the allegation undermines ongoing efforts to strengthen trust among regional countries and prevent a further escalation of insecurity in the region.

The incident comes as a 60-day ceasefire between the US and Iran expired, stoking concerns that tensions in the region could escalate.

Emmanuel Belostrino, head of global crude and geopolitical market data at Kpler, said that the 60-day window established by the Islamabad Memorandum of Understanding of 17 June lapsed on Aug. 17 with no peace agreement, no extension, and no active talks.

The latest data from Kpler show the truce cleared the conflict's stranded backlog in three weeks and moved about 374 million barrels of crude out of the Gulf, but it never reopened the Strait of Hormuz.

The 60-day window's shortfall relative to normal Hormuz flows is about 550 million barrels of crude, bridged so far by inventory draws and truce-window buffers that thin starting in September.

The latest escalation also came after President Trump insisted there were no talks ongoing with Iran to end the war that has upended energy markets.

"There are no talks or conversations going on, or scheduled, with the Islamic Republic of Iran," Trump said in a social media post on Truth Social on Tuesday.

Soojin Kim, research analyst at MUFG, said that Brent climbed after Trump said no negotiations with Iran were underway, leaving the strait contested and traffic through the key energy chokepoint severely constrained.

The global crude market remains focused on the Hormuz, with confirmed crossings through the strategic waterway plunging 17% from the previous day to 10, with six vessels exiting the Middle East Gulf and four entering, according to Kpler.

On the supply side, US crude inventories rose by 4.4 million barrels to 428.8 million barrels last week, the Energy Information Administration said in its weekly report on Wednesday. Crude inventories are matching the five-year average for this time of year, the EIA said.

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