Oil prices declined on Friday but remained on course for a monthly increase of about 20 per cent as rising supplies through key maritime routes eased some market concerns despite ongoing tensions in the Middle East.
Brent crude futures fell $1.44, or 1.6 per cent, to $87.59 per barrel by 0658 GMT, while U.S. West Texas Intermediate (WTI) crude dropped $1.59, or 1.9 per cent, to $82 per barrel. Both benchmarks were still set for their strongest monthly performance in recent periods, with gains of roughly 20 per cent.
Daniel Hynes, senior commodity analyst at ANZ, said oil prices were being pressured lower by signs of increased supply movement through the Strait of Hormuz, despite continued geopolitical risks.
The Strait of Hormuz, one of the world’s most important energy shipping routes, typically handles about one-fifth of global crude oil and liquefied natural gas shipments. The waterway has remained a major focus for energy markets following disruptions linked to the U.S.-Israeli war on Iran that began on February 28.
Although tanker movements have continued through the Strait of Hormuz and the Red Sea, heightened security concerns have increased shipping costs and insurance premiums, keeping a geopolitical risk premium embedded in oil prices.
Saudi Arabia is seeking to lead a multinational maritime defence coalition aimed at strengthening security cooperation around the Bab el-Mandeb Strait, the Red Sea and the Gulf of Aden, which are critical routes for global energy supplies.
The Saudi defence ministry said 14 countries, including Djibouti, Egypt, Pakistan, Sudan and Turkey, have expressed support for the proposed coalition.
Meanwhile, Iran-aligned Houthi militants in Yemen recently announced a naval blockade targeting Saudi Arabia, raising concerns over potential disruptions to the Red Sea route used for some Saudi oil exports.
Analysts said while crude prices have retreated from recent highs, the overall market outlook remains supported by continued geopolitical uncertainty and supply risks.
Priyanka Sachdeva, an analyst at Phillip Nova, said the easing in prices reflected improved supply flows but warned that elevated security risks would continue influencing market sentiment.
