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EMEA Oil Update: Oil Prices Fall to 3-Months Low

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Oil prices fell to its lowest since March on Friday after US President Donald Trump claimed a major diplomatic breakthrough that could bring an end to active hostilities with Iran.

Front-month Murban crude futures declined 6% to $81.98 per barrel, while Brent futures retreated by 2.4% to $88.25/bbl.

The sudden reversal was triggered by Trump's announcement during a media interaction at the Oval Office on Thursday that Washington has reached a "great settlement" to end the war with Iran.

"We just made a great settlement of the war with Iran, and we're going to be subject to finalization of documents," Trump said, according to the statement posted on White House's social media account.

ING analysts said, "The price action in oil markets is no surprise, with Brent falling below $90/bbl on the latest developments. The relatively benign price action in recent weeks masks the scale of the supply disruptions from the Persian Gulf."

"We believe the market reaches an inflection point in late July if we do not see oil flows resuming before then. This is when inventory levels and seasonally stronger demand push prices significantly higher towards $120-130/bbl," ING analysts added.

Meanwhile, Iran's state-backed news agency, IRNA, reported that the future administration and security of the critical Strait of Hormuz chokepoint would ultimately be handled as a regional matter through dialogue and joint decision-making between Tehran and Oman.

Earlier, Trump confirmed he canceled the scheduled Thursday night strikes following high-level discussions with Iranian leadership, adding that a formal treaty could be finalized and signed in Europe as early as this weekend.

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