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EMEA Oil Update: Oil Prices Extend Gains on Hormuz Reopening Doubts

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Crude oil futures extended gains on Friday driven by growing skepticism over a potential Strait of Hormuz reopening and fresh regional tensions.

Brent crude futures rose 1.2% to $83.46 per barrel, while Murban crude futures advanced by 2% to $81.10/bbl. However, both the benchmarks were headed for second straight weekly losses.

"Crude oil gained as cracks appeared around the proposal to reopen the Strait of Hormuz," ANZ analysts noted.

ING analysts noted that oil prices rallied earlier, taking Brent back above $82/bbl, and this strength continued into early morning trading.

Developments over the past 24 hours demonstrated once again that negotiations between the US and Iran are unlikely to proceed smoothly, ING said.

Geopolitical friction intensified further as Iranian state media reported strikes on hostile targets in the Strait of Hormuz, alongside claims from Houthi militants of a large-scale attack against Yemen's Saudi-backed government forces.

"For now, we hold onto our view that flows will start to normalise through the third quarter, which leaves us expecting Brent to average $80/bbl this quarter. However, there's plenty of risk and uncertainty to this view," ING added.

Weighing on broader market adjustments, Saudi Arabia cut its official selling prices for almost all crude grades to all destinations for September loadings.

Arab Light destined for Asia was reduced by $0.50/bbl to a $2/bbl discount against the benchmark, responding to pressure from Asian buyers navigating longer, costlier shipping routes around Africa to bypass Red Sea hazards, analysts said.

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