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US Oil Update: Crude Rises Over 1% as Iran Warns Regional Neighbours Over US Strikes

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Crude oil benchmarks rose over 1% on Thursday as markets weighed supply disruptions and unfinalized Iran-Oman shipping talks, compounded by reports that Tehran has warned Gulf states to dissuade Trump from launching new US strikes.

Front-month West Texas Intermediate crude futures gained 1.2% to $76.08 per barrel, while Brent futures were up 1.6% to $80.73/bbl.

Iran urged Gulf states to dissuade US President Donald Trump from launching new strikes, as any attack would prompt a retaliation against their critical assets, including energy infrastructure, electricity grids, water facilities, and transportation systems, Reuters reported Thursday.

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

The proposed framework would reportedly grant Tehran control over ships entering the Gulf through the strait.

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

On the inventory front, the US Energy Information Administration reported that domestic commercial crude oil inventories increased by 2.5 million barrels to 407 million barrels for the week ending July 31.

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

To compensate for Middle Eastern supply losses stemming from the conflict involving Iran, Chinese refining giant Sinopec scaled up its Far East Russian oil imports.

Sinopec secured 30 to 40 shipments of Russia's Eastern Siberia-Pacific Ocean crude for delivery between July and September.

Concurrently, ongoing conflict prompted further disruptions as Ukraine struck two more Russian oil refineries overnight to choke off energy export revenues.

Amid these volatile logistics, eight major international shipping associations submitted a joint petition urging the United Nations and the International Maritime Organization to reject any compulsory transit tolls or service fees in the Strait of Hormuz, warning that passage charges would violate international law and destabilize global markets.

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