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EMEA Oil Update: Oil Prices Rise Amid Hormuz Diplomacy, Persisting Supply Tensions

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Crude futures gained on Thursday as investors weighed ongoing Iran-Oman shipping negotiations against renewed Houthi attacks on Saudi oil tankers.

Brent crude futures rose 2.3% to $81.25 per barrel, while Murban crude futures rose 1.1% to $78.82/bbl.

Iran's Foreign Ministry spokesperson Esmaeil Baqaei said Iran and Oman are nearing a final understanding on a commercial shipping route through the Strait of Hormuz, according to the Ministry of Foreign Affairs' Telegram post on Wednesday.

The proposed framework would grant Tehran control over ships entering the Gulf through the strait, Reuters reported citing officials familiar with the matter.

"Looking ahead, oil markets are likely to stay conditioned by how diplomatic efforts evolve and any breakthroughs," said Ramy markets analyst Zeytouni.

"Further progress toward a deal could open the way for prices to ease as supply prospects improve. Conversely, renewed escalation could quickly revive upside risk as constrained shipping keeps supply conditions tight," Zeytouni added.

Sentiment was further complicated by renewed supply tensions following reports of Houthi missile attacks on Wednesday targeting a Saudi oil tanker off the Red Sea port of Yanbu and another in the Gulf of Aden.

On the supply side, US commercial crude oil inventories increased by 2.5 million barrels to 407 mmbbls in the week ended July 31, the Energy Information Administration said in its weekly report on Wednesday.

Meanwhile, Saudi Aramco lowered September crude premiums, for Arab Light crude to Asian buyers by $0.50 to $2/bbl below the Oman/Dubai average.

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US Oil Update: Crude Mixed as Inventory Build, Hormuz Optimism Offset Houthi Attack

Crude futures diverged in after-hours trading on Wednesday, pressured by a build in crude inventories and renewed optimism over potential diplomatic progress to reopen the Strait of Hormuz, even as a fresh Houthi attack on a Saudi oil tanker in the Red Sea offered some support.Front-month West Texas Intermediate crude futures retreated by 0.9% to $75.08 per barrel, while Brent futures were up 0.2% to $79.53/bbl.Saxo Bank strategists said that WTI slipped toward $74.50/bbl, taking the two-session decline past 10%, its steepest such drop in weeks.US commercial crude oil inventories increased by 2.5 million barrels to 407 mmbbls in the week ended July 31, the Energy Information Administration said in its weekly report on Wednesday. Crude inventories were about 6% below the five-year average for this time of year, the EIA said.The increase is in line with Macquarie's estimate of a 2.5-mmbbl build for the week ended July 31.The EIA said that US fuel prices edged lower in early August as crude oil prices declined from late July levels, while gasoline and diesel prices remained elevated compared with a year earlier.WTI crude oil at Cushing, Oklahoma, settled at $86.16/bbl for the week ending July 31, dropping from $91.74 a week earlier, though remaining well above the $68.39 level recorded during the same period last year.Meanwhile, Iran's Foreign Ministry spokesman, Esmaeil Baghaei, said Iran and Oman had reached an understanding on the geographic coordinates for a shipping route through Hormuz, and a joint announcement is being finalized.Baqaei said talks between Iran and Oman had been underway for the past two months to establish a safe passage mechanism for commercial vessels transiting the strategic waterway.President Trump said on Tuesday that an agreement to reopen and ensure maritime security on the Hormuz is imminent, as he hailed "very good discussions" with Iran.US Central Command also said the "southern route of the Strait of Hormuz remains free and open" in a post on X, highlighting that it had assisted over 1,000 vessels in transiting the waterway despite "unwarranted" Iranian aggression.ING strategists said if a deal holds and we see oil flows from the Persian Gulf normalize, market attention will quickly turn to the supply and demand balance in the fourth quarter and 2027.Shoring up prices, Yemen's Houthis attacked a Saudi oil tanker in the northern Red Sea off the coast of Yanbu on Wednesday, a day after the Gulf state diverted ships away from the Bab el-Mandeb chokepoint to the south of the waterway.Houthi spokesperson Yahya Saree said that the latest attack brings the total number of targeted Saudi oil tankers to eight since the start of the group's maritime blockade on July 22.Saree said the group intends to target Saudi tankers in the northern Red Sea to "close all access points and prevent their passage" as it vows to "continue and escalate" its operations.

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