Oil prices dropped on Friday, though they remain on track for a monthly gain of about one-fifth. Supply shipments increased through vital maritime passages despite a lack of progress in talks between Iran and the US.
Brent crude futures fell $1.03, or 1.2 percent, to $88 a barrel as of 02:15 GMT, while US West Texas Intermediate (WTI) crude slipped $1.50, or 1.8 percent, to $82.09 a barrel.
On a monthly basis, both benchmark contracts were poised to rise by roughly 20 percent.
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.
According to analysts, the temporary relief is helmed by the resumption of shipping activity across the strategic Strait of Hormuz, helping offset concerns over the conflict involving the United States, Israel and Iran.
The Strait of Hormuz remains as one of the critical waterways that runs the global economy, 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.
Although vessel movements have improved in recent days, traders remain cautious given the fragile security situation across the region.
At the geopolitical market, 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 efforts stem from Houthi’ latest naval blockade, targeting Saudi Arabia last week, threatening oil exports through the Red Sea.