CRUDE WRAP: WTI (U6) SETTLES USD 0.87 LOWER AT USD 83.59/BBL; BRENT (V6) SETTLES USD 1.21 LOWER AT USD 86.88/BBL

Crude futures eased amid reports that Iran is continuing to talk with Oman about management of the Strait of Hormuz, while a Pakistan Foreign Ministry spokesperson also said that talks between Tehran and Washington regarding the Strait and de-escalation remain ongoing. Reports also suggest that transit through the Strait has rebounded, with at least seven ship pairs transferring cargo near Sohar today; two shippers are moving volumes near pre-escalation levels, while ADNOC cargoes delayed for weeks are reaching buyers, Bloomberg said. Still, flows remain below pre-war levels despite US military escorts and resumed regional shipments. Iran’s IRGC, however, continues to hold its position that ships may transit if they accept its arrangements. Iran yesterday rejected Oman’s joint framework, and proposed sole authority over its side of the Strait of Hormuz, as well as partial control over the southern lane, which would give Iran operational control over inbound and outbound maritime traffic. Today, the IRGC said they will "punish aggressors today" following recent attacks.

Elsewhere, Russia’s Ryazan refinery (17mln tonnes annual capacity) halted crude processing after a Ukrainian drone attack on Wednesday, and may remain shut for two weeks; Reuters said that despite the shutdown, it continued offering gasoline and diesel on the St Petersburg International Mercantile Exchange.

And in the North Sea, UK PM Burnham signalled that his government may support new North Sea oil and gas drilling, saying the UK would not “ignore” the UK domestic energy resources. Burnham said he told President Trump that the UK would take a pragmatic approach to the North Sea.