LONDON: Oil prices slipped on Friday as fresh signs of increased shipping through key Middle East routes eased some supply concerns, but crude markets remained on track for a strong monthly gain of nearly 20% due to ongoing regional tensions.
Brent crude futures fell $1.03, or 1.2%, to $88 a barrel by 0215 GMT, while US West Texas Intermediate (WTI) crude declined $1.50, or 1.8%, to $82.09 a barrel. Despite the daily decline, both benchmarks were set for a monthly increase of around 20%.
“Crude oil edged lower as rising tensions in the Middle East were offset by signs of increased shipping through the Strait of Hormuz,” ING analyst Daniel Hynes said.
The Strait of Hormuz, one of the world’s most important energy routes, typically carries around one-fifth of global crude oil and liquefied natural gas shipments.
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The waterway has remained a major focus for oil markets since disruptions began following the launch of the US-Israel war on Iran on February 28. Concerns over possible supply interruptions have contributed to higher oil prices.
Although tanker traffic has continued through the Strait of Hormuz and the Red Sea, increased security risks have pushed up freight costs and insurance premiums, adding a geopolitical risk factor to crude prices, said Priyanka Sachdeva, an analyst at Phillip Nova.
“While prices eased from recent highs, the broader trend remains constructive,” Sachdeva said.
Saudi Arabia is seeking to lead a coalition aimed at strengthening maritime defence cooperation in key energy routes, including the Bab El-Mandeb Strait, the Red Sea, and the Gulf of Aden.
The Saudi Defence Ministry said 14 countries, including Djibouti, Egypt, Pakistan, Sudan, and Türkiye, support the proposed multinational maritime defence coalition.
Meanwhile, Yemen’s Houthis announced a naval blockade on Saudi Arabia last week, raising concerns over the Red Sea route, which serves as an alternative pathway for Saudi oil exports.
While increased shipping activity has helped ease some immediate supply concerns, analysts say geopolitical risks continue to influence global oil markets.
Traders are closely watching developments in the Middle East, particularly around major energy routes, as any further disruptions could affect crude supply flows and price movements.
