Crude slipped as proposed Saudi naval pact and Hormuz talks cap intraday rally

Global crude benchmarks settled lower on Thursday as plans for a Saudi-led maritime defense coalition and ongoing diplomatic dialogue offset fresh military strikes and physical supply disruptions.

International Brent crude fell $1.71 (1.88%) to settle at $89.03 a barrel, while US West Texas Intermediate (WTI) dropped 87 cents (1.03%) to finish at $83.59 a barrel.

Session trading was marked by intense volatility. Crude initially rallied—following exchange strikes between US and Iranian forces, before pricing momentum reversed sharply in afternoon trade.

Downward momentum was driven by Saudi Arabia’s initiative to assemble a 14-nation maritime coalition—including Turkey, Egypt, and Pakistan—to protect shipping across the Red Sea, the Bab el-Mandeb Strait, and the Gulf of Aden. Downside pressure was reinforced as continued talks between Oman and Tehran signaled potential progress toward restoring transit through the Strait of Hormuz, encouraging trader expectations that substantial sidelined supply could soon re-enter the market.

Broader losses were capped by lingering global physical supply threats. Tankers retreated from the Caspian Pipeline Consortium (CPC) terminal following an attack on a vessel loading in the Black Sea, a Ukrainian drone strike forced the shutdown of a crude distillation unit at Russia's Perm refinery, and Houthi strikes targeted oil facilities in Saudi Arabia's Eastern Province.

Written by: Aiman Haikal