FINWIRES · TerminalLIVE
FINWIRES

EMEA Oil Update: Oil Surges as UAE-Iran Cutoff, Strait of Hormuz Tensions Escalate

By

Oil prices rallied sharply taking Brent to a near 4-week peak while Murban crude hit record highs, fueled by escalating tensions in the Strait of Hormuz and a complete trade cut-off between the UAE and Iran.

Brent surged over 3% to $94.70 per barrel and hovered near its highest since July 24, while Murban crude futures gained 1.6% to $100.99/bbl and hit their highest ever based on available data.

The market rally is heavily driven by the numerous geopolitical flashpoints in the Middle East, analysts said.

"Brent crude held above $91 per barrel into Thursday's session, extending a four-day run of gains as President Trump announced sweeping new economic measures against Iran and the UAE cut trade and financial ties with Tehran," Saxo Bank analysts said.

UAE announced the immediate suspension of all economic and financial transactions with Iran on Tuesday.

While US President Donald Trump insisted the strait remains open and warned that nations providing a lifeline to Tehran will face economic consequences, Iranian officials countered that the waterway remains shut.

Ebrahim Rezaei, a member of the Iranian parliament's national security and foreign policy committee reportedly said on Wednesday that Iran could place the Strait of Hormuz under armed forces control and restrict certain vessels under a proposed security bill.

The risk of crossing the Strait of Hormuz remained high with three China-linked supertankers turning around in the waterway, and commercial tracking data confirming depressed vessel traffic volumes due to the dangers involved in passing through it.

On the supply side, US commercial crude oil inventories increased by 4.4 million barrels to 428.8 mmbbls in the week ended Aug. 14, the Energy Information Administration said in its weekly report released Wednesday.

Related Articles

Oil & Energy

Trump Says Hormuz Open, Signals Iran Sanctions as US Oil Supply Expands

US President Donald Trump said Wednesday the Strait of Hormuz remains open but suggested the key oil route may become less important as US energy supplies expand.President Trump delivered the remarks at the White House alongside technology leaders."Right now, the strait is open. A lot of boats are coming through," Trump said, adding that he believes media reports have not fully reflected the level of vessel traffic through the waterway.Trump also signaled possible fresh strong sanctions against Iran, saying, "We have things that we could sanction... and we'll see what happens."The president said a US naval blockade has also restricted vessels from reaching Iran, describing the measure as highly effective while acknowledging that some ships continue to reach other destinations."The blockade has been 100% successful. No boats have gotten into Iran, but they are getting in for other places." Trump said.Trump said that increased US oil production, new pipelines, and alternative energy supplies could reduce the Strait of Hormuz's importance to global oil markets."The Hormuz Strait is not going to be quite as important as it was in the past," Trump said.He cited Texas, Alaska and Louisiana as alternative US oil-producing regions, while also pointing to record levels of pipeline construction as another way to strengthen domestic energy flows."It'll either be extremely good and oil prices are going to drop like a rock, or we'll continue to do exactly what we're doing," Trump added, recalling earlier expectations that oil could reach $350 per barrel.Trump said oil prices were at $84/bbl to $85/bbl and pointed to growing US production as an additional source of supply for energy markets.Trump also criticized South Korea for declining to assist in efforts related to the Strait of Hormuz, saying the country receives 60% of its oil from the waterway.Addressing reporters earlier in the day, Trump mentioned that US-Iran talks could take place "at some point."He added that many boats had sailed through the Strait of Hormuz the previous night, reiterating that the US had possession and complete control of the strait.

Oil & Energy

Red Sea Traffic Rebounds as Hormuz Shipping Remains Suppressed

Commercial vessel traffic through the Bab el-Mandeb Strait rebounded on Tuesday, while vessel movements through the Strait of Hormuz remained depressed amid persistent Iranian military activity and heightened security risks, according to maritime data released on Wednesday.The latest data from MarineTraffic, posted on X, show that 46 vessels crossed the Bab el-Mandeb Strait on Tuesday, up 53%, with 30 entering the Red Sea and 16 exiting. No dark transits were recorded on Tuesday.Total transits on Tuesday are up from 30 vessels reported on Monday, and 45 on Sunday, according to MarineTraffic data.The uptick comes amid ongoing regional instability, as commercial traffic in the southern Red Sea continues to operate at suppressed levels following a Houthi-declared naval blockade of Saudi Arabia initiated on July 20.In contrast, traffic through the Strait of Hormuz declined 17% to 10 confirmed crossings on Tuesday, compared with 12 transits on Monday.Tracking data indicates that six vessels exited the Middle East Gulf and four entered.Five transits used Iran's Unilateral Scheme, while no crossings were confirmed under the Hormuz Traffic Separation Scheme, according to a post on X by Kpler.However, ship transits have increased this week, with only three ships passing through the Strait of Hormuz on Sunday.The subdued activity reflects continued security concerns around one of the world's key energy chokepoints.The International Maritime Organization's daily Strait of Hormuz incident tracker showed that the total number of confirmed maritime security incidents in the region was 66 as of Wednesday.An incident was reported on Monday in the Strait of Hormuz where a bulk carrier was damaged, and a seafarer was killed, according to the tracker.The IMO tracker provides a daily log of verified strikes on ships attempting to transit the Strait of Hormuz since the conflict began, with the earliest incident recorded on March 1.US military activity is also adding another layer of uncertainty for commercial shipping.The US Army has redirected 65 commercial vessels, disabled three and boarded two to enforce its blockade against Iran as of Aug. 19, according to an X post on Wednesday by the US Central Command.

Oil & Energy

Turkey, Syria Expand Energy Cooperation as Power Exports Near 900 MW

Turkey and Syria are expanding energy cooperation across power, oil, natural gas and mining, with electricity exports set to reach above 800 megawatts, Energy Minister Alparslan Bayraktar said Wednesday.Bayraktar met Syrian Energy Minister Muhammed Al-Bashir, with the two sides discussing electricity, mining and phosphate, oil and natural gas, offshore drilling, energy transmission lines and transportation.The new transmission link will help address Syria's electricity needs and extend daily lighting hours across the country, Bayraktar said.The minister noted that with the Birecik-Aleppo Line, set to be commissioned in the coming weeks, Turkey will almost triple these exports and reach 800-900 megawatts.Bayraktar said Turkey and Syria could expand cooperation in oil and natural gas, particularly by developing energy transit routes as the global energy crisis increases the importance of regional supply networks."Our companies, especially Turkish Petroleum, are ready for both the Syrian off-shore and on-shore fields," Bayraktar said, adding that Turkish firms could work on producing fields, assets with potential for higher output and areas open to new exploration."First of all, we want to work with you to bring these resources of Syria to the economy with different companies through partnerships, with a seismic study, followed by drilling works," Bayraktar said. He added Turkey wants to bring its geothermal expertise to Syria.Turkey's General Directorate of Mineral Research and Exploration, MTA International Mining and Syria's General Directorate of Geology and Mineral Resources signed a memorandum of understanding to build a strategic mining partnership, including cooperation on phosphate.