-- EMEA crude futures rallied in after-hours trading on Wednesday as a dual blockade in the Strait of Hormuz, and President Trump's hardening Iranian rhetoric stoked fears of a prolonged global energy supply shock.
Brent crude futures climbed 7.13% to $119.19 per barrel, while Murban oil futures gained 2.44% to $109.31/bbl.
"President Trump has instructed aides to prepare for an extended blockade of Iran, targeting the regime's coffers in a high-risk bid to compel Iran to end its nuclear program," Saxo Bank strategists said in a note on Wednesday.
Trump reportedly said he will maintain a naval blockade against Iran until Tehran agrees to a nuclear deal, noting that the blockade is somewhat more effective than the bombing. The US President threatened Iran on Wednesday, saying the country "better get smart soon".
"Iran can't get their act together. They don't know how to sign a non-nuclear deal. They'd better get smart soon!" Trump said in a post on Truth Social.
The second round of US-Iran talks to end the Middle East conflict has stalled in recent days as the two sides refuse to budge in negotiations and Tehran attempts to separate the Hormuz issue from its nuclear program.
Soojin Kim, research analyst at MUFG, said crude prices remained elevated as markets focused on stalled US-Iran peace talks and the continued near-closure of the Hormuz.
The US naval blockade appears to be putting pressure on Iran, amid reports that the country is running out of crude storage space, which could accelerate production cuts.
US Treasury Secretary Scott Bessent said Iran's Kharg Island, the country's primary oil export terminal, is approaching storage capacity, which will likely force the government to reduce crude production and cause damage to Iran's oil infrastructure.
"Iran is also facing growing storage constraints that could force deeper production cuts, while the US continues tightening sanctions on Chinese refiners linked to Iranian oil," Kim said.
Meanwhile, Kim said the ongoing Middle East conflict has already triggered broader regional shifts, including the UAE's decision to leave OPEC next month.
"The timing of the exit was planned well," ING strategists said, adding that announcing a departure during a period of significant supply disruption limits the market impact.
On the supply side, signs of tightening have begun to appear in the US, with the latest data from the Energy Information Administration showing that US crude stocks fell by 6.2 million barrels to 459.5 million barrels in the week ended Apr. 24.