Oil Prices Decline as Crude Shipments Eases Supply Concerns

Oil prices declined on Friday as increased crude shipments through key global shipping routes helped ease supply concerns, even as tensions between the US and Iran continued without a diplomatic breakthrough.

The Brent crude futures price fell by $1.03, or 1.2%, to $88 per barrel, while US West Texas Intermediate (WTI) crude dropped $1.50, or 1.8%, to $82.09 per barrel during early trading.

Despite the latest decline, both benchmark contracts remain on course to post monthly gains of around 20%, reflecting the significant impact of geopolitical tensions on energy markets.

Market analysts said improving oil flows through strategic maritime chokepoints have helped offset fears of severe supply disruptions, particularly in the Strait of Hormuz, which normally carries around one-fifth of the world's crude oil and liquefied natural gas shipments.

The Strait has remained at the centre of market attention since the outbreak of the US-Iran conflict earlier this year, but tanker traffic through the Strait and the Red Sea has continued, albeit with higher freight costs and insurance premiums due to elevated security risks.