Oil prices ease as shipping flows improve through key maritime routes.
Oil prices edged lower on Friday as improved shipping flows through key maritime chokepoints eased immediate supply concerns. However, crude remained on track for a monthly gain of around 20% amid persistent geopolitical tensions in the Middle East.
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Brent crude fell $1.03, or 1.2%, to $88 a barrel, while US West Texas Intermediate (WTI) declined $1.50, or 1.8%, to $82.09 a barrel in early trading. Despite the losses, both benchmarks were set to record strong monthly gains.
Shipping flows ease supply concerns
Analysts said increased tanker movements through the Strait of Hormuz helped reduce concerns over immediate supply disruptions.
Daniel Hynes, senior commodity analyst at ANZ, said improved shipping activity had offset the impact of continued tensions in the Middle East.
The Strait of Hormuz carries roughly 20% of global crude oil and liquefied natural gas shipments. Since the outbreak of the US-Israel conflict with Iran in late February, the waterway has remained a key focus for global energy markets.
Regional tensions continue to support prices
Meanwhile, Saudi Arabia is leading efforts to establish a multinational maritime defence coalition to protect shipping through the Bab el-Mandeb Strait, the Red Sea and the Gulf of Aden.
According to the Saudi Defence Ministry, 14 countries, including Pakistan, Egypt, Turkey, Sudan and Djibouti, have backed the initiative.
Furthermore, Iran-aligned Houthi militants in Yemen recently announced a naval blockade targeting Saudi Arabia, raising fresh concerns over the security of Red Sea shipping routes.
Although tanker traffic has continued through both the Strait of Hormuz and the Red Sea, higher security risks have pushed freight charges and insurance premiums higher.
Analyst Priyanka Sachdeva of Phillip Nova said geopolitical uncertainty continues to support oil prices despite the recent pullback.
She added that while crude has eased from recent highs, the broader market trend remains positive.
