- Despite latest dip, monthly gains remain strong.
- Hormuz shipments offset Middle East tensions.
- US-Iran talks yield no major breakthrough.
Oil prices fell on Friday but kept on track for a monthly rise of about a fifth, as more supplies flowed through crucial maritime chokepoints, despite a lack of major breakthroughs in talks between the United States and Iran.
Brent futures fell $1.03, or 1.2%, to $88 a barrel by 0215 GMT, while US West Texas Intermediate (WTI) crude slipped $1.50, or 1.8%, to $82.09 a barrel. On a monthly basis, both benchmarks were set to rise about 20%.
Crude oil edged lower as rising tensions in the Middle East were offset by signs of increased shipping through the Strait of Hormuz, ING analyst Daniel Hynes said.
The strait, which usually carries about a fifth of global shipments of crude oil and liquefied natural gas, has been a focal point for oil markets as it has been largely blockaded since the February 28 launch of the US-Israel war on Iran.
Saudi Arabia seeks 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.
The Saudi defence ministry said 14 nations, including Djibouti, Egypt, Pakistan, Sudan and Turkiye, were in support of the multinational maritime defence coalition.
Houthis in Yemen declared a naval blockade last week on Saudi Arabia, threatening the Red Sea route for its oil exports, an alternative to the Strait of Hormuz.
Although tanker traffic has continued through the Strait of Hormuz and the Red Sea, higher security risks have boosted freight costs and insurance premiums to embed a significant geopolitical risk premium in oil prices, said Priyanka Sachdeva, analyst at Phillip Nova.
“While prices eased from recent highs, the broader trend remains constructive,” Sachdeva said.
