Oil prices slipped as tanker traffic through the Strait of Hormuz improved, easing immediate supply concerns. However, Brent and WTI crude remain on track for a roughly 20 per cent monthly gain as geopolitical tensions across West Asia continue to support prices
Oil prices on Friday fell as signs of improving tanker traffic through the Strait of Hormuz eased immediate supply concerns, even as the market remained on course for its strongest monthly rally in years amid persistent geopolitical tensions across West Asia.
Brent crude futures slipped $1.03, or 1.2 per cent, to $88 a barrel in early trade, while US West Texas Intermediate (WTI) crude fell $1.50, or 1.8 per cent, to $82.09 a barrel.
Despite the decline, both global benchmarks were set to end July about 20 per cent higher, underscoring how fears over disruptions to key oil shipping routes have kept energy markets on edge.
Hormuz traffic offers temporary relief
Analysts said crude prices eased after shipping activity through the Strait of Hormuz showed signs of stabilising, helping offset concerns over the conflict involving the United States, Israel and Iran.
The Strait of Hormuz is one of the world’s most critical energy chokepoints, handling nearly one-fifth of global crude oil and liquefied natural gas shipments. The waterway has remained at the centre of market attention since the US-Israel war on Iran erupted on February 28, raising fears of supply disruptions.
More from BusinessAlthough vessel movements have improved in recent days, traders remain cautious given the fragile security situation across the region.
Geopolitical risks continue to support oil
Market participants said geopolitical risks continue to underpin oil prices despite Friday’s pullback.
Saudi Arabia is leading efforts to establish a multinational maritime security coalition aimed at safeguarding shipping routes through the Bab el-Mandeb Strait, the Red Sea and the Gulf of Aden — key arteries for global energy trade.
According to Saudi Arabia’s defence ministry, 14 countries, including Egypt, Pakistan, Djibouti, Sudan and Turkey, have expressed support for the initiative.
The move comes after Iran-backed Houthi militants in Yemen announced a naval blockade targeting Saudi Arabia last week, threatening oil exports through the Red Sea, which serves as an important alternative route to the Strait of Hormuz.
Markets await diplomatic progress
Investors are also closely watching diplomatic efforts between Washington and Tehran, though recent talks have produced little sign of a breakthrough.
With no meaningful progress in easing regional tensions, analysts expect oil prices to remain volatile in the coming weeks, as traders balance improving supply flows against the risk of fresh geopolitical escalations.
For now, easing congestion through the Strait of Hormuz has helped cool prices from recent peaks, but the prospect of supply disruptions continues to keep crude on track for a sharp monthly gain.
