Oil prices moved lower on Friday as improving tanker activity through the Strait of Hormuz helped ease short-term concerns over supply disruptions.
However, the market remained on track for one of its strongest
monthly performances in years due to ongoing geopolitical tensions in West Asia.
Brent crude futures declined by $1.03, or 1.2 per cent, to $88 per barrel, while US West Texas Intermediate (WTI) crude dropped $1.50, or 1.8 per cent, to $82.09 per barrel.
Despite Friday’s decline, both major crude benchmarks were expected to close July nearly 20 per cent higher, reflecting continued concerns over possible disruptions to major oil transportation routes.
Market analysts said prices retreated after shipping movements through the Strait of Hormuz showed signs of recovery, reducing immediate supply fears linked to the conflict involving the United States, Israel and Iran.
The Strait of Hormuz remains one of the world’s most important energy transit routes, carrying around one-fifth of global crude oil and liquefied natural gas shipments.
The waterway has been closely monitored since the US-Israel conflict with Iran began on February 28, raising concerns over possible disruptions.
Although shipping activity has improved recently, traders remain cautious due to continuing instability in the region. Geopolitical concerns continue to provide support to crude prices despite the latest decline.
Saudi Arabia is spearheading efforts to create a multinational maritime security coalition to protect shipping routes across the Bab el-Mandeb Strait, the Red Sea and the Gulf of Aden, which are vital routes for global energy supplies.
Saudi Arabia’s defence ministry said 14 countries, including Egypt, Pakistan, Djibouti, Sudan and Turkey, have supported the proposed initiative.
The development follows a recent announcement by Iran-backed Houthi militants in Yemen about a naval blockade targeting Saudi Arabia, raising concerns over oil shipments through the Red Sea, an important alternative route to the Strait of Hormuz.
Investors are also monitoring diplomatic discussions between the United States and Iran, though recent negotiations have shown limited progress towards reducing tensions.
Analysts expect crude markets to remain volatile in the coming weeks as traders assess improving supply conditions against the possibility of renewed geopolitical disruptions.
For now, increased traffic through the Strait of Hormuz has helped bring prices down from recent highs. However, ongoing risks to energy supplies continue to support expectations of a significant monthly gain in crude prices.
