Oil News: WTI and Brent Slide on Report of Pakistan-Backed Iran Talks

• September WTI settled at $89.31 (down $2.88) and Brent at $96.78 (down $3.01) after five-session rallies that pushed WTI from $80 to above $92 and Brent from mid-$80s to over $100
• Despite diplomatic developments, U.S. military completed a thirteenth consecutive night of strikes on Iranian targets, and Houthi forces struck two Saudi tankers near Bab el-Mandeb this week
• UBS forecasts Brent at $85 by year-end if conditions normalize, but warns Middle East shipping recovery will take longer than markets expect, as the Strait of Hormuz remains impaired and Red Sea routes face continued pressure

Oil Market Summary: WTI and Brent Retreat on Diplomatic Developments

Key Price Movements

Crude oil futures declined sharply Friday, July 25, 2026, triggered by diplomatic developments. September Brent crude settled at $96.78, down $3.01 (-3.88%), while September WTI crude finished at $89.31, down $2.88 (-3.12%). Despite Friday's retreat, both contracts posted strong weekly gains: WTI rose 9.21% and Brent gained 9.85%, with prices climbing from mid-$80s to above $100 for Brent and from $80 to above $92 for WTI over five sessions.

Catalysts and Developments

The selloff followed reports of Pakistan-backed U.S.-Iran talks, facilitated by China to address the Hormuz Strait disruption affecting Chinese energy security. However, military tensions persist, with the U.S. conducting a thirteenth consecutive night of strikes on Iranian targets, hitting command centers and drone facilities.

Supply Risk Factors

The Strait of Hormuz remains impaired, requiring U.S. naval escorts for vessels, while Red Sea shipping faces continued pressure following Houthi attacks on two Saudi tankers near Bab el-Mandeb. Elevated insurance costs and cargo diversions around Africa persist, maintaining significant supply-risk premiums.

President Trump indicated he is close to deciding on potential "massive attack" against Iran, with officials describing a "head for an eye" approach, adding uncertainty.

Market Outlook

UBS projects Brent at $85 by year-end if conditions normalize but warns Middle East shipping recovery will take longer than markets expect. Technical support for WTI sits at $84.54-$81.21, with the 50-day moving average at $80.96. Brent faces support at $90.61-$86.70.

The market's focus remains on tanker traffic, military decisions, and whether critical shipping routes genuinely reopen rather than diplomatic headlines alone.