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US Oil Update: Futures Slide as Pakistan Reportedly Pushes for US-Iran Talks

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Crude futures fell in midday trading on Friday as markets assessed reports that Pakistan is pushing to facilitate talks between the US and Iran, which eased concerns over a potential escalation that could threaten global crude supplies.

Front-month West Texas Intermediate crude futures tumbled 3.4% to $89.02 per barrel, while Brent futures slipped by 4.2% to $96.42/bbl.

Soojin Kim, research analyst at MUFG, said with both the Strait of Hormuz and the Red Sea now exposed to disruption, the market is increasingly pricing a broader logistics-driven supply shock.

Pakistan is reportedly exploring a resumption of stalled US-Iran negotiations to end their nearly five-month-old conflict, following a diplomatic push by China, Tehran's largest trading partner.

Though Iranian officials have maintained public defiance, Iran's Interior Minister Eskandar Momeni traveled to Islamabad this week for exploratory talks, marking his second visit in ten days.

Momeni, reportedly considered an ally of the Islamic Revolutionary Guard Corps, met with Pakistani leaders and defense chief Asim Munir during the trip.

President Trump said he will soon make a decision on whether to launch a "massive attack" on Iran as the Middle East conflict has widened a new battleground in the Red Sea.

The Red Sea has become a crucial alternative export route for Saudi Arabia, allowing the Gulf state to bypass the Strait of Hormuz and continue shipping barrels a day to global customers.

The US Central Command said it had completed a thirteenth consecutive night of attacks on Iran, targeting Iranian military command centers, drone storage facilities, communication networks, and coastal surveillance sites to further diminish the threat Tehran poses to vessels transiting the Hormuz.

Centcom said that over 50,000 US service members are operating across the Middle East.

Iran, in response, said it attacked US military equipment depots at Al-Adiri, known as Camp Buehring, in northern Kuwait, and the positions of US troops at Camp Arifjan and at Camp Doha, near Kuwait City.

Tehran also said they had significantly damaged a surveillance tower used by the US Fifth Fleet in Bahrain. On Friday, the IRGC warned the populations of Gulf countries of potential strikes against US military personnel who may be using "buildings in cities as locations to direct their crimes."

Kim said Trump warned of a potentially larger US military response against Iran, while Iran threatened retaliation against regional energy infrastructure if attacks escalate further.

On the supply front, the security situation in Hormuz has deteriorated over the past weeks, with MarineTraffic's shipping data showing only six confirmed crossings on July 23, down 60% from the day before.

MarineTraffic said that five of the six vessels followed the Iranian Unilateral Scheme, highlighting the continued concentration of traffic along that route.

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