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EMEA Oil Update: Crude Tumbles as Mixed US-Iran Signals Weigh on Market Outlook

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EMEA crude futures fell by over 5% in after-hours trading on Monday as markets weighed conflicting signals from the US and Iran over the prospects for peace talks, with expectations of a potential easing in geopolitical tensions that could boost supplies from the Middle East.

Brent crude futures retreated by 4.7% to $83.79 per barrel, while Murban crude futures dropped 5.3% to $80.93/bbl.

Saxo Bank strategists said that October Brent steadied near $83.50/bb/l, down over $4 from Friday's close, but almost $2 higher from $81.55 lows.

President Trump said on Monday that discussions with Iran were taking place despite Tehran's public denials, accusing Iranian leaders of being "duplicitous" and warning that the US would not allow the country to develop a nuclear weapon.

Trump said Iran had sought a meeting with US officials and that talks had begun, with additional discussions expected in the near future.

He claimed Iranian officials were attempting to downplay the engagement publicly by saying they were only communicating with Oman and that no negotiations were underway.

"Iranian leadership is unbelievably duplicitous! They ask for a meeting, talks begin, with more scheduled, and then they say they're not having any discussions," Trump said in a social media post on Truth Social.

The US President said on Sunday that he had called off a planned strike on Iran after receiving a request from Tehran and other countries in the Middle East.

Trump said the proposed agreement with Iran would include the immediate, complete, and total opening of the Hormuz Strait.

"We have previously seen again and again that Trump declares a halt to US attacks and "ongoing negotiations", while Iran then fires yet another set of rockets and drones at US military bases, US Middle East allies or ships sailing through the SoH," said Bjarne Schieldrop, chief commodities analyst at SEB Research.

Meanwhile, Iran's Foreign Ministry spokesman Esmaeil Baghaei said Tehran was only holding talks with Oman on what route ships can sail through the Hormuz, and it was not currently engaged in negotiations with the US.

"The understanding with Oman on a safe shipping route is a necessary condition for reopening the Strait of Hormuz, but it is not a sufficient one," said Baghaei.

On the supply front, OPEC+ approved an oil production quota increase of about 188,000 barrels per day from September on Sunday. The producer group has raised quotas each month throughout the Middle East conflict even as supply from the region remains constrained by disruption in the Hormuz.

The Oxford Institute for Energy Studies projected that OPEC+ crude production is now forecast to decline by 4 million barrels per day in 2026, about 500,000 b/d more than previously expected.

The institute said global oil supply is forecast to contract by 4.5 million b/d in 2026, a downward revision of 360,000 b/d from its previous estimate. The decline is expected to be followed by a strong rebound of 6.8 mb/d in 2027.

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