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EMEA Oil Update: Crude Slides as Tanker Traffic via Hormuz Rises After US-Iran Deal

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EMEA crude futures fell in after-hours trading on Wednesday as shipping data showed an increase in tanker transits via the Strait of Hormuz following the signing of the US-Iran peace deal, easing concerns of immediate supply disruption.

Brent crude futures retreated by 4% to $74.02 per barrel, while Murban crude futures were down 3.4% to $67.24/bbl.

The market is increasingly pricing a steady return of stranded supply following one of the most severe disruptions in recent history, Saxo Bank strategists said, adding that UAE exports have already recovered to about 85% of pre-war levels.

Brent prices are trading near pre-war levels amid a recovery in supplies through the Strait of Hormuz. "Brent crude slipped below $77 per barrel, leaving prices less than 10% above pre-war levels, as tanker traffic through the Strait of Hormuz continues to normalise," Saxo Bank analysts said.

On Wednesday, President Trump, in a social media post, said that Iran had informed him there would be no tolls, insurance costs, or charges of any kind for vessels looking to transit the strategic waterway. Trump said no money has been given to Iran or released from their frozen assets by the US.

Trump's remarks come shortly after the US and Iran signed an interim peace deal to end the Middle East conflict. Under the memorandum, both sides agreed to reopen the Strait toll-free for at least 60 days and to end all hostilities, including in Lebanon.

The latest shipping data shows that more commercial vessels are transiting the strategic waterway with their satellite signals switched on, with Kpler reporting 31 verified crossings across commercial and energy-linked vessels.

Kpler said the Hormuz appears operational under the US-Iran MoU, but dark-route activity and uncertainty beyond the 60-day window keep the recovery cautious.

Oman said it would keep the Hormuz open to shipping without imposing tolls and had designated two temporary routes, north and south of the existing shipping lane, to facilitate the safe passage of vessels leaving the region.

The International Maritime Organization also said on Tuesday it had received safety guarantees allowing hundreds of ships to exit the Persian Gulf.

Macquarie strategists said global commodities markets are poised for a faster-than-anticipated normalization after the reopening of the Strait, with Brent price projected to average about $77/bbl in 2026 and $64/bbl in 2027.

On the supply front, Soojin Kim, research analyst at MUFG, said additional supply is returning to the markets as the UAE has restored most of its pre-war production levels, while Kuwait and Iraq are also ramping up exports.

Meanwhile, US commercial crude oil inventories decreased by 6.1 million barrels to 412.1 mmbbls in the week ended June 19, the Energy Information Administration said in its weekly report on Wednesday. Crude inventories are now about 7% below the five-year average for this time of year, the EIA said.

Gelber & Associates analysts said the selloff in crude markets comes despite a supportive US inventory print, with commercial crude stocks drawing 6.1 mmbbls last week, as product builds and demand concerns kept the bullish impact limited.

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US Oil Update: Crude Slips as Markets Focus on Hormuz Flows After US-Iran Deal

Crude oil futures settled lower in after-hours trading on Tuesday as markets assessed crude flows through the Strait of Hormuz following signs of progress in US-Iran peace negotiations.Front-month West Texas Intermediate crude futures were down by 0.7% to $73.37 per barrel, while Brent futures dropped by 0.9% to $77.15/bbl.ING strategists said the gradual increase in flows through the Strait of Hormuz continues to weigh on the market, while positive signals from US-Iran talks in Switzerland have weighed on sentiment.US Secretary of State Marco Rubio said on Tuesday that Iran would not be able to levy tolls in the strategic waterway as part of any final agreement with Washington, adding that such an arrangement would violate international law."No country is allowed to charge tolls or fees on an international waterway," Secretary Rubio said.On Tuesday, President Trump said in a social media post that 19 million barrels of oil flowed out of the Strait on Monday, while pointing to falling oil prices.Kpler strategists said that the US-Iran peace deal, which triggered a temporary easing of sanctions, is expected to provide relief from shipping disruptions in the Strait, but the market remains far from a return to normal trade conditions.The analysts said the immediate increase in vessel movements reflects the unwinding of a massive backlog rather than a surge in fresh supply.The latest data show that more commercial vessels are transiting the strategic waterway with their satellite signals switched on, with Kpler reporting that confirmed crossings rose from 32 vessels between June 12-14 to 93 between June 19-21.However, Oman and Iran agreed on Tuesday to press ahead with discussions on the future administration of navigation in the Strait of Hormuz.The two countries agreed to establish a joint working group between their foreign ministries to continue discussions on the future framework governing navigation via the Hormuz.Pressuring crude prices, the US on Monday authorized the sale of Iranian oil and fuels as part of an agreement to end the Middle East conflict.The US Treasury Department issued a 60-day license that allows Iran to sell its energy products through Aug. 21 and make payments in US dollars. The waiver also allows for the importation of Iranian crude oil and other petrochemical and petroleum products into the US.Marine Traffic said in a post on X that the recovery in shipping flow was supported by recent diplomatic developments and the temporary general license, which has helped ease immediate compliance uncertainty around approved Hormuz transits until Aug. 21.Saxo Bank strategists said the temporary license is expected to facilitate the export of some of the estimated 30 million barrels that left Iranian ports last week.

Oil & Energy

Elevated Tanker Rates Weigh on Gulf Crude Exports Despite Rebound in Hormuz Traffic, Kpler Says

High tanker freight rates in the Middle East Gulf are weighing on crude exports from the region despite a recovery in vessel transits through the Strait of Hormuz following a US-Iran memorandum of understanding, according to Kpler analyst Matt Wright, in a Tuesday note.Wright noted that freight rates on the MEG-Asia route are expected to "remain elevated" due to uncertainty surrounding the US-Iran agreement and disruptions in the Strait of Hormuz.These high rates are in sharp contrast with narrowing crude differentials in the region. As a result, Very Large Crude Carrier freight costs rose to 19% of the value of Abu Dhabi benchmark Murban crude as of last week."That exceeds the previous record of 17% set at the start of the conflict," Wright said.Wright noted bullishness in MEG-China VLCC freight rates over the next two to four weeks. He attributed the outlook to owner caution and limited willing tonnage entering the Gulf, pushing rates higher despite a recovery in Hormuz transits.Additionally, prompt Gulf crude differentials are expected to remain under pressure.With freight rates hitting 19% of Murban value, the highest on record, refiners are unwilling to pay higher free-on-board premiums.FOB essentially entails the delivery of cargo onto the ship at the point of origin, where the buyer pays for freight, insurance, and other transportation costs. An FOB crude price reflects the value of crude at the export terminal, excluding shipping and insurance costs.Kpler pegged Atlantic Basin VLCC freight rates as "constructive." However, unladen ballast vessels continue to remain scarce."Vessel repositioning toward the Gulf and continued owner reluctance to ballast west should tighten Atlantic availability," according to the note.The analyst said owner earnings are expected to remain bullish. "Owners already positioned in the Gulf retain pricing power while uncertainty persists," Wright said.Freight normalization could be achieved through a sustained period of uninterrupted Hormuz transits and clear security guarantees.Uncertainty prevails around the MoU between the US and Iran signed last week, Kpler said."Following the signing of the MoU between the US and Iran last week, under which Iran agreed to allow transits through the Strait of Hormuz to resume unimpeded, the number of tankers entering and exiting the MEG climbed to 17 on 20 June, up from just two a week earlier," according to the note.However, this increase occurred shortly before Iran announced that the strait was closed again. "As expected, outbound vessels account for the majority of transits so far," Wright said.The first four weeks since the MoU are "critical" for rebuilding shipowner confidence, with volatility and uncertainty around the Strait's status delaying the process.Shipowner sentiment remains cautious toward transits through the strait."As a result, transits remain limited, and freight remains elevated, broadly in line with our expectations," according to the note.However, the analyst said that tonnage outside the MEG continues to rise, while the number of vessels willing to enter remains relatively low."Availability outside the Strait is not the constraint; owner willingness to bring vessels into the Gulf remains the bottleneck," according to the note.The rise in transits aligns with Kpler's estimates.Since the MoU was signed on June 18, 12 VLCCs have entered the MEG.Of these, five carried sanctioned-linked cargoes in the previous 12 months, and all seven non-Iranian-linked vessels can be linked to South Korean shipping company Sinokor, which controls nearly 130 VLCCs and therefore retains significant negotiating leverage in the market."Consequently, while more VLCCs are entering the Gulf, the shift has not materially improved charterers' negotiating position," according to the note.The concentration of willing vessels has limited charterers' bargaining power and prevented a significant easing of freight costs despite increased tanker arrivals.Wright said they remain bullish on MEG-China VLCC freight rates through early July, citing constrained vessel availability within the Gulf and a slower-than-expected recovery in owner confidence."The key downside risk is a rapid normalization in owner behaviour that brings a larger share of the waiting fleet back into the Gulf faster than cargo demand expands," the report said.

Oil & Energy

Rubio Says No Country Allowed to Charge Tolls in International Waterway

US Secretary of State Marco Rubio on Tuesday said that no country is permitted to charge tolls in international maritime corridors."No country is allowed to charge tolls or fees on an international waterway. That's existing international law," Rubio said when asked whether the US and its allies can guarantee freedom of navigation through the Strait of Hormuz.Rubio made the remarks during a press interaction at the Al Bateen Executive Airport in Abu Dhabi.He said discussions over the last 72 hours established a framework for progress with Iran, although negotiations remain ongoing.Asked about Iran's claim that it had not agreed to International Atomic Energy Agency inspections, Rubio said, "We know what they agreed to do.""And now they'll either do it or they won't. And if they do, the process moves forward. And if they don't, the President will have some decisions to make," Rubio added.Rubio said the US is consulting Gulf partners following meetings in Switzerland and wants their views considered as negotiations move forward."I think there's a framework and an outline upon which we can make real progress. I think good groundwork was laid over the last 72 hours, but a lot of work remains to be done," Rubio said.The Secretary said Gulf allies support efforts to achieve peace, while emphasizing that regional security and economic concerns remain important considerations in the talks.Rubio said discussions about any future reconstruction fund for Iran remain premature and would depend on decisions made by Iran's leadership as well as progress on broader security matters."If Iran makes a decision, if its leadership makes a decision that they want to be a country instead of a revolutionary movement that exports terror, they're going to have an opportunity to do incredible things in Iran," Rubio said.