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EMEA Oil Update: Crude Rises on Trump Remarks on Hormuz Security Risks

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EMEA crude futures rose in after-hours trading on Thursday after President Trump ordered the US Navy to "shoot and kill" Iranian vessels attempting to mine the Strait of Hormuz, as the two countries maintain restrictions on the flow of trade via the strategic waterway.

Brent crude futures advanced by 1.58% to $103.47 per barrel, while Murban oil futures were up 1.14% to $104.29/bbl.

"Oil prices rose for a fourth straight session... as tensions between the US and Iran intensified following failed peace talks and an ongoing battle over the Strait of Hormuz," said Soojin Kim, research analyst at MUFG.

Though Trump extended a ceasefire with Iran after a request from Pakistan, the two countries are still restricting the transit of ships via the key energy chokepoint, which handled about 20% of daily global oil supplies until the start of the Middle East conflict.

The US President said on Thursday that he had ordered the US Navy to "shoot and kill" boats laying mines in the Hormuz, while claiming that Washington now has "total control" over the passage and directed the military to act without hesitation against Iranian small boats.

On Thursday, the US Department of War said its forces intercepted a sanctioned tanker in the Indian Ocean that was carrying oil from Iran. The interception comes a day after the US blocked the Iranian tankers M/V Hero II, M/V Hedy and M/V Dorena.

"We will continue global maritime enforcement to disrupt illicit networks and interdict vessels providing material support to Iran, wherever they operate," the Department said.

Iranian officials have accused the US of breaching its commitments under a 10-point framework that Iran offered at the start of a fragile ceasefire, with parliament speaker and top negotiator Mohammad Baqer Qalibaf saying a full ceasefire would only make sense if the US lifts its blockade.

The deputy speaker of Iran's parliament, Hamidreza Haji Babaei, said that the first tranche of tolls collected from ships passing the Hormuz has been deposited into the Iranian central bank's account, according to local media.

"The key question is thus timing of the reopening. The market may now be on the verge of a shift from 'a deal is imminent' to 'this may take much longer'," Bjarne Schieldrop, chief commodities analyst at SEB, said.

The fees charged reportedly vary from ship to ship, depending on their type, size and cargo. The collected fees are being deposited into a single account, and decisions on how to spend funds will be made later, according to media reports.

On Wednesday, Iran's Islamic Revolutionary Guards attacked three vessels and diverted two to Iranian territorial waters. Both vessels are operated by MSC, according to MarineTraffic.

ING strategists said the reality of the supply disruption will set in as hopes fade, leaving further upside for prices.

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