FINWIRES · TerminalLIVE
FINWIRES

EMEA Oil Update: Crude Rises After US-Iran Clashes, Kuwait Attacks

By

EMEA crude futures rose in after-hours trading on Wednesday after the US and Iran traded strikes, casting doubt on the prospects of a peace deal and stoking concerns about potential supply disruptions in the Middle East.

Brent crude futures advanced 2.02% to $97.97 per barrel, while Murban oil futures advanced 0.99% to $97.04/bbl.

Soojin Kim, research analyst at MUFG, said crude prices rose for a third consecutive session as growing doubts over a US-Iran peace deal and renewed tensions heightened concerns about prolonged supply disruptions.

The US and Iran traded strikes again earlier on Wednesday, with Kuwait and Bahrain caught in the crossfire of the most serious flare-up since a ceasefire went into effect in early April.

On Wednesday, Iran said it had targeted the headquarters of the US Navy's 5th Fleet in Bahrain and another country in its attack, without naming Kuwait. Tehran said it launched its attack in response to the US firing a missile into the engine room of another oil tanker trying to reach its ports despite the US blockade.

The Kuwait Defense Ministry said in a social media post that it had intercepted 13 ballistic missiles and 17 drones launched from Iran into Kuwaiti airspace since dawn. The US Central Command responded with strikes on an Iranian command center on Qeshm Island in the Strait of Hormuz.

"US forces successfully defeated multiple Iranian ballistic missiles and drones, and conducted self-defense strikes on Qeshm Island in response to attempted attacks by Iran across the Middle East," CENTCOM said.

However, President Trump and Secretary of State Marco Rubio said on Tuesday that peace negotiations to end the Middle East conflict were ongoing, pushing back against Iranian media reports suggesting communications had broken down.

Saxo Bank strategists said the risk premium continues to be partly offset by Trump's repeated insistence that an interim agreement remains within reach.

Meanwhile, US crude inventories dropped amid strong export and refining demand as the Middle East conflict entered its fourth month. Crude stockpiles decreased by 8 million barrels to 433.7 mmbbls in the week ended May 29, the Energy Information Administration said in its weekly report on Wednesday.

US Strategic Petroleum Reserve inventories fell to 357.1 mmbbls, down from 365.1 mmbbls a week ago, marking a weekly decline of 8 mmbbls.

On the supply front, the prolonged closure of the Strait of Hormuz is raising concerns that the world will need to tap crude inventories further, after the International Energy Agency said global oil inventories could hit critical levels ahead of the peak summer demand period.

Related Articles

Oil & Energy

Market Chatter: Vitol Sees Rising Risk of Gasoline Tightness Amid Summer Demand Surge

Gasoline could emerge as the next fuel market under pressure as inventories sit below seasonal norms and the Iran conflict continues to disrupt petroleum trade flows, Bader Nooruddin, regional head of research at Vitol, Bloomberg reported Wednesday.The conflict has hit diesel and jet fuel markets the hardest so far, as export disruptions through the Strait of Hormuz reduced supplies from Middle East refiners.Refiners in the US and other regions have increased diesel and jet fuel output to address supply shortages, reducing gasoline production and tightening supplies of other refined products."Gasoline could be the next product to get impacted," Nooruddin said at S&P Global's Middle East Petroleum & Gas Conference in London.Nooruddin added inventories in the US and global gasoline markets remain well below seasonal norms, highlighting mounting supply strains.Demand for both gasoline and jet fuel is set to rise as the northern hemisphere enters its summer holiday season, potentially creating competition for available supply.Vitol didn't immediately respond to' request for comment.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

Oil & Energy

Oil May Hit $200/bbl if Strait of Hormuz Remains Closed Into 2027, Macquarie Says

Oil prices could climb toward $200 per barrel if the Strait of Hormuz remains closed into 2027, even though markets have so far weathered the largest supply disruption in history, Macquarie analysts said in a Wednesday note.The waterway has been effectively closed for three months, reducing global oil supplies by about 14%. Despite the loss, front-month Brent crude is trading below $100/bbl, about one-third above pre-conflict levels and roughly half the inflation-adjusted peak reached in 2008.According to Macquarie, the relatively muted price response reflects the large oil inventories accumulated before the conflict.The bank noted that global stockpiles were elevated amid what the International Energy Agency had previously described as "untenable surpluses," helping the market avoid widespread shortages of crude oil and refined products.Citing S&P Global data, Macquarie said global oil and product inventories stood at about 7.2 billion barrels as of May 22, down roughly 380 million barrels from late February levels but still around 200 million barrels above those seen in early 2025.The bank estimates inventories have been declining by about 5 million barrels per day over the past month. If that pace continues, stocks could return to early-2025 lows by July, approach 2022 trough levels by August and fall below the range seen so far this decade by September.While the market is likely to remain adequately supplied for another month or two, aided by draws from strategic petroleum reserves and product inventories, Macquarie warned that physical availability would tighten significantly if the Strait remains closed beyond the northern hemisphere summer.The bank said Brent prices could rise to between $130/bbl and $150/bbl if the disruption persists through early September. Should the conflict continue into 2027, prices of around $200/bbl may be needed to rebalance the global oil market.

Oil & Energy

Oil Holds Ground as Energy Industry Embraces Tighter Market, RBC Says

Energy executives struck a bullish tone on oil and gas markets, citing stronger crude prices, robust refining margins and growing demand for liquefied natural gas, even as geopolitical risks and the expansion of artificial intelligence infrastructure, RBC Capital Markets said on Tuesday.RBC strategists said executives across the supply chain were planning for a higher-for-longer oil price environment, supported by tighter global supplies, inventory drawdowns, and concerns over lost production.Crude producers said market conditions had improved markedly compared with a year ago, with several companies indicating greater confidence in accelerating expansion projects while continuing to focus on operational efficiencies.Baseline price assumptions have shifted materially higher over the year, the analysts said, adding that producers see a tighter market persisting for longer despite ongoing volatility.Oil refiners also maintained a constructive outlook, pointing to strong margins and resilient demand, particularly in Europe.RBC analysts said that there was little evidence of significant fuel demand destruction despite elevated crude prices. Refiners, instead, are maximizing output through measures such as delaying maintenance and increasing jet fuel yields.Though energy executives avoided direct commentary on ongoing conflicts in the Middle East and Ukraine, RBC said companies are acknowledging that current market conditions could require rebuilding strategic petroleum inventories to higher levels than before recent disruptions.On the natural gas front, executives said geopolitical uncertainty was reinforcing the appeal of supply security, boosting long-term prospects for LNG exporters in North America and other producing regions.Companies said importers appeared willing to absorb higher costs to secure reliable supplies, as producers in the US, Canada and Australia are positioning to meet growing LNG demand from Asia.RBC said that the closure of the Strait of Hormuz has heightened concerns about supply security and accelerated buyers' efforts to diversify sourcing.Meanwhile, energy executives are increasingly confident in forecasts of natural gas demand from artificial intelligence-driven data centers.RBC estimates that AI-related data centers could consume between 6 billion cubic feet per day and 7 Bcf/d of US natural gas, adding to the significant surge in demand expected from LNG export projects.The majority of LNG companies expect large technology firms to continue to favor natural gas-fired power generation because of its reliability and availability. Despite the upbeat outlook, industry executives said supply chain constraints could pose a significant challenge.Though AI and data centers dominated many natural gas discussions at the RBC Global Energy, Power & Infrastructure Conference, energy executives agreed that LNG exports remain the largest driver of global gas demand growth through at least the next decade.