Oil Prices Swing Sharply Amid US-Iran Diplomacy and Maritime Security Concerns

Oil prices swung sharply throughout the week ending July 31 as markets weighed efforts between the US and Iran against escalating military tensions. The US-Iran negotiations, military exchanges, and maritime security developments dominated oil market sentiment.

The international benchmark Brent crude futures for October traded at $88.58 per barrel on Friday, down 3.4% from last Friday's close of $91.68. Meanwhile, the US benchmark West Texas Intermediate (WTI) futures for September traded at $85.39 per barrel, up 0.3% from the previous week's close of $85.15.

The decline in oil prices started after US President Donald Trump paused military strikes on Iran, raising expectations that Washington and Tehran could return to negotiations. The move eased concerns over an immediate disruption to Middle East oil supplies and prompted investors to unwind much of the geopolitical risk premium built into prices during the previous week's rally.

However, concerns over security in the Strait of Hormuz and the Bab el-Mandeb Strait continued to limit losses, with markets closely monitoring talks between Iran and Oman aimed at restoring safe maritime navigation through the strategic waterway. The rally lost momentum on Friday after Saudi Arabia and 13 partner countries announced the formation of a multinational maritime defense coalition to safeguard shipping through the Bab el-Mandeb Strait.