Saudi export resumptions and persistent Hormuz flows drove 10.8% weekly Brent collapse

Crude benchmarks suffered a brutal Friday sell-off, sealing severe weekly contractions as physical transit through the Strait of Hormuz accelerated despite ongoing regional hostilities.

The international Brent contract plunged $3.27 (4.34%) to settle at $71.99 a barrel, cementing a massive 10.86% week-over-week collapse. US WTI shed $2.69 (3.74%) to close at $69.23, marking a 9.62% weekly decline.

The market narrative has aggressively inverted from geopolitical risk pricing to the rapid digestion of an imminent structural oversupply.

Physical cargo movements are actively validating the bearish tape. Saudi Aramco officially resumed crude loading at its Ras Tanura Gulf terminal following a four-month operational halt, with marine tracking confirming two 2-million-barrel capacity Very Large Crude Carriers (VLCCs) taking on prompt supply. This sudden influx of stranded Middle Eastern barrels is colliding with a fundamentally weak macro environment, directly exacerbated by an ongoing failure of Chinese crude demand to accelerate.

Geopolitical friction and isolated product-side constraints provide the only remaining market support. While Strait traffic hit post-war highs, total transit volumes remain well below pre-conflict baselines as Iran reasserts sovereign control over the waterway and warns regional Gulf states against US alignment.

Simultaneously, global middle distillate markets face severe impending tightness; Russian authorities are formally considering a multi-month diesel export ban following crippling Ukrainian drone strikes on domestic refining infrastructure.

Written by: Aiman Haikal