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Global crude futures extended their rally on 27 March Friday, posting strong weekly gains as investors weighed entrenched geopolitical risks over recent diplomatic overtures.

Brent surged $4.56, or 4.2%, to settle at $112.57 a barrel, while US WTI advanced $5.16, or 5.5%, to close at $99.64.

The gains pushed Brent’s cumulative war premium to 53% since late February, with WTI trailing at 45%, reflecting growing market scepticism toward conciliatory US statements after Tehran dismissed the US-brokered peace proposal as fundamentally one-sided.

Physical markets remain sharply dislocated amid compounding supply shocks. Geopolitical tensions were heightened by Washington’s extension of the deadline for Iran to reopen the Strait of Hormuz under threat of military action, alongside discussions to deploy an additional 10,000 troops to secure the strategic Kharg Island oil terminal.

Market experts have noted that these disruptions have already removed roughly 11 million barrels per day from the global market, a shortfall the International Energy Agency now describes as more severe than the combined 1970s oil shocks.

Structural tightness is also intensifying in Eastern Europe, where Russian producers warned of potential force majeure declarations on Baltic Sea cargoes following repeated Ukrainian drone strikes. With analysts projecting Brent could test $200 a barrel if the conflict persists through June, market attention remains squarely on the tangible deficit of supply rather than unverified ceasefire reports.

Written by: Aiman Haikal