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EMEA Oil Update: Oil Futures dip as Israel and Iran Halt Escalation

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Oil benchmarks declined on Tuesday after Israel and Iran signaled a pause in direct military actions after a flare up in the last few days, providing some reassurance to energy markets.

Front-month Murban crude futures dipped 2.6% to $89.50 per barrel, while Brent futures fell 1.5% to $92.84/bbl.

Israeli Prime Minister Benjamin Netanyahu reportedly confirmed that the country is holding its fire against Iran for the time being.

This aligned with an earlier announcement from Tehran's central military command, Khatam al-Anbiya, stating that its strikes against Israel had ceased, though it warned operations would immediately resume if Jerusalem struck Lebanon.

Sentiment was further stabilized by a Truth Social post from US President Donald Trump, who claimed both foes are seeking to formalize an immediate ceasefire.

Despite the cooling rhetoric, underlying risks to supply remain many.

Threatening alternative supply routes, Yemen's Houthi rebels announced a comprehensive ban on Israeli shipping in the Red Sea.

ANZ analysts noted that while there is some conjecture surrounding what explicitly constitutes an Israeli vessel, the mandate introduces vulnerabilities to a critical bypass corridor, specifically for Saudi Arabia.

It has historically relied on its East-West pipeline to export upwards of 4 million barrels per day through its Red Sea port of Yanbu and it has been a lifeline for the country's exports since the start of the Iran war.

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