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EMEA Oil Update: Crude Rises on Iran Uranium Comments, Tightening Global Stockpiles

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EMEA crude futures climbed in after-hours trading on Thursday, reversing earlier losses, on reports that Iran's supreme leader will not allow the country's enriched uranium to be shipped abroad, as signs of tightening global crude inventories lent further support.

Brent crude futures rose by 1.55% to $105.68 per barrel, while Murban oil futures jumped 3.59% to $106.93/bbl.

Iran's Supreme Leader Ayatollah Mojtaba Khamenei has reportedly issued a directive ordering Iran's enriched uranium to remain in the country.

The directive from the Supreme Leader could further complicate negotiations and frustrate President Trump's efforts to broker a peace deal to end the ongoing conflict. The US has said dismantling Iran's nuclear program is a central objective of the US-Israeli alliance's conflict against Tehran.

"We will get it. We don't need it. We don't want it. We'll probably destroy it after we get it, but we're not going to let them have it," Trump told reporters at the White House on Thursday.

"Oil edged higher after a sharp selloff, as President Trump said the US was in the 'final stages' of negotiations with Iran, raising hopes for a potential reopening of the Strait of Hormuz and a gradual recovery in energy flows," said Soojin Kim, research analyst at MUFG.

Fueling bullish sentiment, the International Energy Agency said on Thursday that global oil markets could soon enter a "red zone" as global stocks deplete and as demand picks up during the summer travel season.

IEA executive director Fatih Birol said the single most important solution to the Iran war energy shock is a full and unconditional reopening of the Strait of Hormuz.

Speaking at Chatham House, Birol said that if the Strait of Hormuz is reopened and no new oil comes online from the Middle East, an ongoing drawdown in global stockpiles, combined with demand during the summer travel season, means oil markets may enter the red zone in July or August.

Saxo Bank strategists cited Goldman Sachs to say that global crude and refined product inventories are currently being drawn down at a record pace this month.

US crude oil inventories dropped by 7.9 million barrels to 445 mmbbls in the week ended May 15, the Energy Information Administration said in its weekly report on Wednesday. Crude inventories are now about 2% below the five-year average for this time of year, the EIA said.

Meanwhile, the Middle East conflict, now in its 12th week, has choked traffic via the Strait, keeping global energy markets tight and driving energy prices and inflation higher.

"While a reopening of the Strait of Hormuz could initially unleash a wave of supply from vessels already loaded and waiting to depart, broader market normalization would likely take months given disrupted logistics, displaced shipping and depleted inventories," Saxo Bank strategists said.

The US military has redirected 94 Iran-linked commercial vessels and disabled four others since imposing the blockade on April 13, the US Central Command said on Thursday.

Iran's Islamic Revolution Guards said on Thursday that 31 commercial vessels, including oil tankers and container ships, safely transited the Hormuz over the past 24 hours.

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Oil & Energy

US Natural Gas Update: Prices Climb on Geopolitics, Larger Storage Build

US natural gas futures rose in midday trading on Thursday, supported by renewed geopolitical uncertainty after reported setbacks in US-Iran negotiations and a larger-than-expected weekly storage build reported by the US Energy Information Administration.The front-month Henry Hub contract gained 0.57% to trade at $3.021 per million British thermal units, while the continuous contract climbed 4.69% to $3.145/MMBtu.EIA reported that domestic natural gas inventories increased by 101 billion cubic feet for the week ended May 15, bringing total stocks to 2,391 Bcf.The build exceeded expectations, clustering around 95-98 Bcf, and left inventories 33 Bcf above year-ago levels and 149 Bcf above the five-year average of 2,242 Bcf, while remaining within the seasonal historical range.Earlier in the session, prices firmed on geopolitical headlines after Iran's Supreme Leader reportedly ordered the Islamic Revolutionary Guard Corps to retain uranium reserves and threatened potential attacks on energy infrastructure in Gulf Cooperation Council countries, adding a risk premium to the market.Weather fundamentals, however, continued to limit upside. Forecast models from NatGasWeather.com indicated Low to Moderate demand over the next three days, then shifting to Low to Very Low demand thereafter, reflecting mild conditions across much of the US.NRG Energy noted a more mixed near-term demand picture, with total US consumption rising roughly 1 Bcf per day. Gains in residential/commercial, industrial, and LNG feedgas demand offset a 2.7 Bcf/d decline in power burn.Looking ahead, NRG said residential and commercial demand is expected to rise by about 2.4 Bcf/d, while LNG feedgas could recover above 17 Bcf/d, compared with a recent monthly average of 16.9 Bcf/d, as seasonal maintenance continues to constrain flows.On the LNG pricing side, Kpler said Japan's import costs are likely to rise sharply into the third quarter as higher crude prices feed through oil-linked contracts with a typical three-to-five-month lag. Kpler projected Japan's LNG import costs would rise from about $10.74/MMBtu in March to roughly $17.50/MMBtu in July.The firm added that firmer Asian spot LNG prices, tighter US fundamentals, and ongoing shipping disruptions are also contributing to higher delivered costs, underscoring how Japan's contract-heavy procurement structure delays but does not prevent exposure to global price volatility.

Oil & Energy

Rubio Calls Hormuz Tolling System 'Illegal,' Says Pakistan Officials Head to Tehran as Iran Talks Continue

US Secretary of State Marco Rubio said Thursday that Iran's efforts to implement a tolling system were "illegal" and that officials from Pakistan planned to travel to Iran as part of ongoing diplomatic efforts surrounding Iran negotiations.Rubio made the remarks during a press interaction before departing for official visits to Sweden and India.Responding to a question on Iran's negotiations with Oman to set up a tolling system in the Strait of Hormuz, Rubio said the US has always opposed it."We've always said a tolling system in the Strait would be unacceptable. But we don't just say that, the world has said that," Rubio said.He said the US delegation had discussed Iran's tolling system plan in China during Trump's visit last week."We were in China last week. We mentioned this about the tolling and they're against it. No one in the world is in favor of a tolling system. It can't happen. it would be unacceptable," Rubio said.He called the move "illegal," and added that it would make a peace deal "unfeasible.""It would make a diplomatic deal unfeasible if they were to continue to pursue that. So it's a threat to the world if they were trying to do that. And it's completely illegal by the way," Rubio said.Rubio said a Pakistani delegation would head to Iran on Thursday to follow up on peace deal efforts. "I believe the Pakistanis will be traveling to Tehran today [Thursday], so hopefully that will advance this further," Rubio said.He added that the Trump administration still prefers a diplomatic agreement with Iran while speaking to reporters ahead of his departure to Sweden."The president's preference is to do a good deal, that's his preference... If we can get a good deal done, that would be great," Rubio said.He added that the administration remains cautious about recent progress in talks with Tehran. "There's some good signs, but we understand this. I don't want to be overly optimistic as well. So, let's see what happens over the next few days," Rubio said.Rubio said the US wants India to increase purchases of American oil and gas supplies as Hormuz instability disrupts markets."We want to sell them as much energy as they'll buy, and obviously you've seen, I think we're at historic levels of US production and US export. We want to be able to do more," Rubio said.He also pointed to Venezuelan oil as another potential source for India's future energy imports."We also think there's opportunities with Venezuelan oil. In fact, it's my understanding that the interim president of Venezuela will be traveling to India next week as well," Rubio said.On the current situation in Cuba, Rubio said the country's energy system continues deteriorating despite years of subsidized Venezuelan crude supplies."They had major blackouts last year, and they were still getting free Venezuelan oil. They haven't spent a penny in fixing their energy production, their electrical grid," Rubio said.Rubio alleged that Cuban authorities were diverting public funds instead of investing in power infrastructure improvements."They have a private military company named Gaiser, who's sitting on $18 billion of assets, and not a penny of that transfers over to the state budget," Rubio said.

Oil & Energy

Market Chatter: Iran, Oman Discuss Permanent Strait of Hormuz Shipping Toll System

Iran is in discussions with Oman to establish a permanent toll system that would formalize its control over maritime traffic through the Strait of Hormuz, Bloomberg reported on Thursday, citing the country's ambassador to France.The initiative follows the closure of the key chokepoint amid the ongoing conflict in the Middle East. The disruption has choked global energy flows and sent oil prices soaring amid mounting inflationary fears."Iran and Oman must mobilize all their resources both to provide security services and to manage navigation in the most appropriate manner," Ambassador Mohammad Amin-Nejad told Bloomberg in an interview in Paris on Wednesday."This will entail costs, and it goes without saying that those who wish to benefit from this traffic must also pay their share," Amin-Nejad said through an interpreter, adding that any future system would be transparent.The Hormuz connects the Persian Gulf to the Indian Ocean. It traditionally handles about 20% of the world's oil and liquefied natural gas supplies, as well as other commodities such as aluminum and fertilizers.Iran has refused to fully reopen the strait until the US lifts its naval blockade on Iranian ports. The confrontation has reduced traffic from a pre-war average of 135 ships per day to a fraction of that figure.Though Amin-Nejad claims that 26 tankers and vessels transited the Strait between Tuesday and Wednesday with the assistance of the Islamic Revolutionary Guard.Shipping companies say the primary deterrents are not just exorbitant insurance premiums, but the immediate threat of drone strikes, missile attacks, and sea mines. Most international shipping lines have suspended transits until a formal peace agreement is reached.The prospect of a permanent Iranian-administered toll system has drawn criticism from Western countries and Gulf Arab neighbors, who maintain that the Hormuz must be treated as international waters under maritime law.Sultan Al Jaber, the managing director and CEO of Adnoc Group, said on Wednesday that formalizing such control would establish a perilous geopolitical double-standard."Once you accept that a single country can hold the world's most important waterway hostage, freedom of navigation as we know it is finished," Al Jaber said. "If we do not defend this principle today, we will spend the next decade defending against the consequences."President Trump has issued conflicting signals regarding the developments, shifting from initial suggestions that the US could levy its own transit fees to warnings that Tehran "better not be" considering a toll system. Trump also floated the possibility of a US-Iran joint venture to manage the strategic waterway.Despite the diplomatic pushback, Iran has already begun implementing an expanded jurisdictional framework over the waterway.Vessels transiting the Hormuz are now required to collaborate with a newly established entity called the Persian Gulf Strait Authority. Ships have reportedly faced payment demands reaching up to $2 million for safe passage in some instances.Iran's Ministry of Foreign Affairs did not 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.)