Middle East Tensions Offset by Shipping Activity: Oil Prices Hold Steady

Oil prices declined on Friday due to increased shipping through key Middle East routes easing supply concerns. However, despite the daily drop, both Brent and WTI crude markets are set for a strong monthly gain of nearly 20%. According to ING analyst Daniel Hynes, 'crude oil edged lower as rising tensions in the Middle East were offset by signs of increased shipping through the Strait of Hormuz.'

The Strait of Hormuz is one of the world's most important energy routes, typically carrying around one-fifth of global crude oil and liquefied natural gas shipments. Analysts say geopolitical risks continue to influence global oil markets, particularly with concerns over possible supply interruptions contributing to higher oil prices.

Saudi Arabia is seeking to lead a coalition aimed at strengthening maritime defence cooperation in key energy routes, including the Bab El-Mandeb Strait, the Red Sea, and the Gulf of Aden. The Saudi Defence Ministry announced that 14 countries support the proposed multinational maritime defence coalition.