(LONDON) – Global oil prices fell by more than US$1 (£0.75) per barrel on Friday despite continuing tensions between the United States and Iran, as crude supplies continued moving through key maritime chokepoints.
According to Reuters, Brent crude futures fell by US$1.03 (£0.77), or 1.2 per cent, to US$88.00 (£65.85) per barrel. US West Texas Intermediate crude declined by US$1.50 (£1.12), or 1.8 per cent, to US$82.09 (£61.43) per barrel.
Despite Friday’s decline, both benchmark crude contracts remain on course to record monthly gains of about 20 per cent.
ANZ senior commodities analyst Daniel Hynes said crude prices eased because increased tensions in the Middle East were being offset by signs of stronger oil flows through the Strait of Hormuz.
Saudi Arabia is seeking to lead a coalition to strengthen maritime security in the Bab el Mandeb Strait, the Red Sea and the Gulf of Aden, all of which are critical global energy supply routes.
Saudi Arabia’s Ministry of Defence said 14 countries, including Djibouti, Egypt, Pakistan, Sudan and Türkiye, support the multinational maritime defence coalition.
Iran aligned Houthi militants in Yemen last week announced a maritime blockade against Saudi Arabia, threatening Saudi oil exports through the Red Sea, an important alternative route to the Strait of Hormuz.
However, tanker traffic through both the Strait of Hormuz and the Red Sea has continued. According to Phillip Nova analyst Priyanka Sachdeva, higher security risks have increased freight rates and insurance costs, adding a significant geopolitical risk premium to oil prices.
Reuters reported on Thursday that oil prices had also fallen despite escalating attacks in the Persian Gulf as investors focused on the continued movement of supplies through the region’s key shipping routes.