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EMEA Oil Update: Crude Settles Lower as Market Weighs US-Iran Deal Prospects

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EMEA crude futures settled lower in after-hours trading on Friday as markets weighed the prospect of renewed US-Iran peace negotiations, which have so far yielded little progress, against persistent concerns over demand destruction.

Brent crude futures fell 2.3% to $92.80 a barrel, while Murban crude declined 2.5% to $91.17 a barrel.

Soojin Kim, research analyst at MUFG, said that despite recent gains, oil prices remain well below levels seen before the April ceasefire, reflecting continued uncertainty over the pace of any lasting regional resolution.

On Thursday, President Trump said that talks with Iran were going well, despite Tehran-backed Hezbollah rejecting a US-brokered ceasefire deal between Israel and Lebanon. Iran has indicated that any wider agreement with Washington would partly depend on an end to hostilities between Israel and the Iran-backed Hezbollah movement.

Iran's Islamic Revolutionary Guard Corps also reportedly said peace in the region would not be possible unless Israel withdrew from the occupied areas in Lebanon.

"Our main condition for accepting a ceasefire in the regional war has been a ceasefire on all fronts, including Lebanon," the IRGC said in a statement.

Oman's main oil export terminal at Mina Al Fahal saw delayed loadings after an explosion disrupted operations, according to media reports. However, operations at the facility outside the Strait of Hormuz resumed.

Oman reportedly exports 800,000 to 900,000 barrels of crude per day from the terminal.

Meanwhile, market participants are also monitoring growing signs of demand destruction across the globe stemming from higher prices and depleting inventories.

The pace of inventory declines will only intensify through the July-September period, ING analysts said, noting that this will leave the market vulnerable and would require higher prices to ensure demand destruction through the summer.

US 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.

The US on Friday sanctioned a network of individuals, companies, and vessels it accused of facilitating the shipment of hundreds of millions of dollars' worth of Iranian liquefied petroleum gas, disguised as Omani-origin cargo, to buyers in South and East Asia.

The Treasury Department said the latest action is part of a broader "maximum pressure" campaign to restrict Iran's ability to generate and repatriate revenue from oil and petrochemical exports, as well as from emerging channels such as cryptocurrency.

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