The thrilling recreation ended 5-5, with Liverpool successful on penalties, however Arsenal had been behind after simply six minutes when Mustafi turned a cross into his own web.
The German spoke out on his error against Liverpool, saying Arsenal had been unfortunate to lose the ten-goal thriller.
He stated: ‘It’s been a tough battle at Anfield and it didn’t assist that I let the crew down to begin with, however we fought again. Unlucky in the top to lose on penalties.’
Arsenal twice led by a two-goal margin at Liverpool, with Divock Origi popping up with a 94th-minute equaliser to power penalties.
Dani Ceballos then missed a penalty for Arsenal, handing Liverpool victory and a spot in the quarter-finals.
Unai Emery praised a ‘crazy’ recreation, however admitted his aspect had been gutted to return out on the unsuitable finish of the outcome.
‘We performed in a optimistic approach and we got here again after the beginning with a very good efficiency and with good persistence.
‘We took confidence from the primary and second half.
‘When they drew degree we once more took the lead. It was an excellent goal and a pleasant second an thrilling second for us and our supporters.
‘They had been right here and the final goal was a foul second for us as a result of it was in harm time and the penalties are 50/50.
‘We lost in that moment but I think we did very good things tonight and also think we can take some players’ confidence which is sweet for them and we’re going to proceed.
‘Now the most important thing is we had good intentions in this competition but we lost and we now focus on Saturday.’
Carabao Cup quarter-final draw
Oxford United vs Manchester City
Manchester United vs Colchester United
Aston Villa vs Liverpool
Everton vs Leicester