Crude secured massive weekly gains as renewed Islamabad diplomacy clashes with entrenched maritime blockade

Crude futures concluded a highly volatile week with mixed Friday settlements, though both benchmarks locked in massive structural gains. The paper market experienced aggressive intraday whipsaws as algorithmic flows liquidated length ahead of the weekend, reacting to the sudden resumption of high-level US-Iranian diplomatic backchannels in Islamabad.

The international Brent contract edged up 26 cents (0.3%) to settle at $105.33 a barrel, securing a steep 16% weekly advance. Conversely, US WTI crude fell $1.45 (1.5%) to close at $94.40, yet still recorded a definitive 13% gain for the week.

The late-session paper selloff was triggered by confirmed reports that Iranian and US special envoys were deploying to Pakistan to evaluate new proposals, momentarily easing immediate geopolitical risk premiums.

Despite the renewed diplomatic optimism in the forward paper market, the fundamental physical matrix remains critically constrained. Operational transit through the Strait of Hormuz is effectively paralysed, with vessel tracking data registering a mere five maritime movements over the preceding 24-hour period. This heavily restricted logistical flow ensures that the underlying global supply deficit will continue to compound, keeping the downstream spot market structurally tight regardless of near-term political developments.

Written by: Aiman Haikal