By Anushree Mukherjee
July 31 (Reuters) - Oil prices rose on Friday and remained on track for a monthly increase as reports that some tankers were forced to turn around in the Strait of Hormuz prompted traders to reassess shipping flows through the key waterway.
Brent futures were up $1.31, or 1.47%, at $90.34 a barrel by 1329 GMT, while U.S. West Texas Intermediate (WTI) crude was up $1.95, or 2.33%, to $85.54 a barrel.
For July as a whole, Brent was on track to rise nearly 24% and WTI about 23%.
"Iranian
media outlets claim that some tankers were forced to turn around, so ... (there are) still low flows of vessels crossing the Strait has supported prices," said Giovanni Staunovo, a UBS analyst.
Iran's Revolutionary Guards stopped two tankers from transiting the Strait, while four others changed course, Fars news agency reported.
TRAFFIC THROUGH STRAIT
However, two very large crude carriers (VLCCs) carrying oil loaded from the Gulf did exit the Strait on Friday, although traffic through the waterway remained thin, according to Kpler ship-tracking data.
Meanwhile, 29 commodities vessels passed through the Bab el-Mandeb strait on Thursday.
"The market has stopped trading the war and started trading the shipping data," said Ole Hvalbye, market analyst at SEB Research.
Talks between Iran and Oman on managing the Strait of Hormuz continue, according to the Iranian Labour News Agency, despite Iran rejecting Oman's proposal for joint management of the waterway.
Saudi Arabia is seeking to lead a coalition to boost defence cooperation in the Bab el-Mandeb strait, the Red Sea and the Gulf of Aden, all chokepoints for energy supplies.
GEOPOLITICAL RISKS REMAIN
A drone strike that sparked fires on two gas vessels in Egypt's Mediterranean port of Damietta has raised a new threat to shipping through the Suez Canal, one of the last major export routes available to Saudi oil amid the expanding U.S.-Israeli war on Iran war.
The war has disrupted traffic through both the Bab el-Mandeb strait and the Strait of Hormuz, two of the world's most important energy chokepoints.
Before the conflict, the Strait alone carried about a fifth of global oil and liquefied natural gas supplies, but traffic through the waterway has since fallen sharply and came to a halt for periods.
Abu Dhabi National Oil Co (ADNOC) has bought five VLCCs for about $590 million, three sources familiar with the matter said, expanding its fleet as conflicts in the Red Sea and the Strait of Hormuz tighten tanker supply.
Elsewhere, Ukraine's military said it hit Russia's Volgograd oil refinery overnight on Friday, causing a fire at the facility.
"Brent is likely to remain in a relatively wide $80-$100 per barrel range in the near term as the market reacts to geopolitical risks," said Paolo Broccardo, CEO of BankPro.
(Reporting by Anushree Mukherjee in Bengaluru, Sudarshan Varadhan; Additional reporting by Ahmad Ghaddar in London; Editing by Ros Russell and David Holmes)
