Oil Prices Drop on Increased Flows Despite Ongoing Tensions

Oil prices fell on Friday but remained on track for a monthly rise of about 20%. Brent futures dropped $1.03, or 1.2%, to $88 a barrel, while US West Texas Intermediate (WTI) crude slipped $1.50, or 1.8%, to $82.09 a barrel.

The decline was attributed to increased flows in the Strait of Hormuz, which has been a focal point for oil markets due to Middle East tensions.

Daniel Hynes, analyst at ING, stated that rising tension is being offset by signs of increased flows in the strait. The strait carries about a fifth of global shipments of crude oil and liquefied natural gas.

Saudi Arabia has announced plans for a multinational maritime defence coalition to boost defence cooperation in various chokepoints for energy supplies, including the Bab El-Mandeb Strait, the Red Sea, and the Gulf of Aden.