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EMEA Oil Update: Crude Rises as Markets Weigh US-Iran Peace Prospects

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EMEA crude futures rose in after-hours trading on Tuesday as markets weighed the prospects of a US-Iran peace deal, following President Trump's statement that talks with Iran were ongoing amid conflicting reports from Tehran.

Brent crude futures gained 0.74% to $95.64 per barrel, while Murban oil futures advanced 1.57% to $95.91/bbl.

"Crude oil continues to trade from one headline to the next, making it increasingly difficult for traders to maintain conviction beyond a few hours," a Saxo Bank strategist said, adding that global energy markets continue to tighten, with the main focus remaining on the Strait of Hormuz.

On Tuesday, Trump said that reports suggesting that the US and Iran had stopped communicating are "fake and erroneous," adding that talks between the two sides have continued over recent days.

"The conversations between us have been going on continuously, including four days ago, three days ago, two days ago, one day ago, and today," Trump said in a social media post on X.

The US President reportedly said that a memorandum of understanding with Iran to reopen the Strait of Hormuz could be reached over the next week. Trump said the US still had "to get a few more points" before a deal.

Iran, meanwhile, suspended the exchange of messages with US negotiators for at least several days and issued threats against vessels transiting the Bab el Mandeb, the Red Sea chokepoint that carries a major share of the world's energy shipments.

ING strategists said the Bab el-Mandeb threat is a concern for oil markets, given that Saudi Arabia has diverted a large amount of crude that should have been exported from the Persian Gulf to the Red Sea.

Fueling uncertainty, Trump and Israeli Prime Minister Benjamin Netanyahu offered differing accounts of a call about the fighting in Lebanon.

Trump said on Monday that he held a call with the Israeli leader, whom he instructed to halt a planned Israeli attack on parts of the Lebanese capital, Beirut, while Netanyahu released a statement saying he had told the US President that his country would attack targets in Beirut if Hezbollah did not stop attacking Israel amid ongoing strikes in Southern Lebanon.

"With commercial traffic through Hormuz still constrained and geopolitical tensions extending to Lebanon, investors remain focused on the risk of prolonged supply disruptions in a region," said Soojin Kim, research analyst at MUFG.

The Middle East conflict has morphed into a stalemate with the Strait largely shut for more than three months after the US-Israel alliance launched strikes against Iran. Traffic via the strategic waterway remains constrained, with CENTCOM saying on Monday that US forces redirected 122 Iran-linked commercial vessels.

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Market Chatter: Adnoc Restarts Naphtha Exports Via Oman Route as Asian Prices Retreat

Adnoc has resumed naphtha exports through Oman's Sohar port after creating an alternative route that bypasses direct shipments through the Strait of Hormuz, Reuters reported Tuesday, citing traders.The company stopped exporting about 1 million metric tons of naphtha per month from its Ruwais refinery in April after the US-Israeli conflict disrupted shipping through the strait, according to the report.Instead of sending cargoes directly to customers, Adnoc is first moving naphtha on smaller tankers inside the Gulf before transferring the product onto larger vessels at Sohar for export to Asia.The new route offers buyers another supply option and helps alleviate concerns about ships transiting the Strait of Hormuz.Two tankers loaded Adnoc-linked naphtha cargoes near Sohar around May 30 and are now sailing toward Asia, the report added, citing shipping data from traders.Traders added that more vessels may have loaded Adnoc cargoes through Sohar, although available shipping records do not show every transfer.Earlier supply disruptions in the Gulf drove Asian naphtha prices to a record $1,300 per metric ton and pushed refining margins to a record $467 per ton above Brent crude, according to the report.With more supplies reaching the market, Asia's benchmark naphtha price for second-half July delivery has fallen to $788 per ton, while refining margins have dropped to about $84 per ton, the report added.Shortages of feedstock have also forced petrochemical plants across Asia to cut production rates and declare force majeure at some facilities, putting further pressure on demand.The International Energy Agency expects global naphtha demand to fall by 80,000 barrels per day to 7.136 million b/d this year.An India-based trader said weak demand and improving supplies should keep prices below the record levels seen in March.Adnoc 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.)

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Adnoc's Executive Sees August as Oil Price Inflection Point Amid Supply Crisis

August could become a critical turning point for oil prices if stronger demand collides with prolonged supply disruptions, Adnoc Executive Vice President for Sales and Trading Philippe Khoury said Monday.As uncertainty surrounding a peace agreement persists, shipping activity through the Strait of Hormuz is unlikely to return to pre-war levels and will remain only partially restored, Khoury said at the Middle East Petroleum and Gas Conference in London."It's not going to resume like a flip of a switch," Khoury said, adding that some supply chains may take weeks to recover while others could require months after flows normalize.A full return to pre-war operating conditions may not arrive until mid-2027, Khoury said.That timeline aligns with Adnoc Chief Executive Officer Sultan Al Jaber's recent forecast that normal flows through the Strait of Hormuz may not resume until Q1 or Q2 2027.After the US-Israeli conflict erupted on Feb. 28, Iran effectively shut a waterway that previously handled about one-fifth of global oil supplies, triggering what Khoury described as the largest energy supply shock in history.Oil could remain near $100 a barrel if weaker economic conditions continue to suppress demand, although Khoury said it remains unclear how much further consumption can contract.Khoury said oil prices may face upward pressure from August if stronger demand collides with continuing supply disruptions.Europe is losing access to a major source of jet fuel as disruptions squeeze Middle Eastern exports that typically account for 40% to 45% of regional supply, while shortages have also spread across liquefied petroleum gas, chemicals, fertilizers, and sulfur markets, Khoury said.Khoury said airlines that hedged jet fuel prices now face a different challenge, as supply shortages rather than costs threaten flight operations.Chinese crude demand has started to recover after previously falling short of expectations, while India has remained one of the largest spot buyers during the crisis, he said.Before Iran's closure of the Strait of Hormuz and US restrictions on Iranian ports created overlapping barriers to trade, China had imported large volumes of Iranian crude, Khoury said.Khoury said Adnoc has restored much of its production and continues moving exports through a pipeline that bypasses the Strait of Hormuz.

Oil & Energy

EMEA Oil Update: Crude Prices Ease as Markets Remain on Edge

Global oil prices held tight to most of Monday's 5% rally, adopting a cautious stance despite US President Donald Trump's expression of optimism for a deal with Iran.Front-month Murban crude futures eased 0.1% to $94.33 per barrel, while Brent futures were down 1.2% to $93.86/bbl."Crude oil continues to trade from one headline to the next, making it increasingly difficult for traders to maintain conviction beyond a few hours," Saxo Bank analysts said.The minor pullback reflects a cautious wait-and-see approach from investors after US President Donald Trump reiterated in a social media post that "it will all work out well in the end."Market sentiment does not share the same apparent confidence however. Iran reportedly said on Monday that it was suspending indirect negotiations with Washington.Compounding the diplomatic gridlock, Iranian state media reported that Tehran is now aiming for a complete blockade of the critical Strait of Hormuz that would halt the small trickle of ships that are managing to cross it.The threat to global oil flows is expanding beyond Hormuz. Iran's proxy militant groups are reportedly considering closing the Bab el-Mandeb Strait at the southern end of the Red Sea.This development is particularly alarming for energy markets, as the Bab el-Mandeb has served as a vital alternative route for Saudi Arabia to bypass the already-closed Strait of Hormuz.