Oil Prices Dip as Saudi, 13 Other Nations Form Maritime Coalition
Oil prices fell on Friday as easing concerns over potential disruptions to key Middle East shipping routes reduced the geopolitical risk premium in crude markets, despite the absence of a major breakthrough in US-Iran talks.
International benchmark Brent crude futures for October traded at $85.26 per barrel, down 1.9% from the previous close of $86.88. US benchmark West Texas Intermediate (WTI) futures traded at $81.86 per barrel, down 2.1% from $83.59 in the previous session.
Market sentiment improved after Saudi Arabia announced a multinational maritime defense coalition to help safeguard critical shipping lanes, while Yemen’s Iran-backed Houthi group sought to reassure markets that the Bab el-Mandeb Strait remains open to international navigation.
Saudi Arabia and 13 other countries announced on Thursday the formation of a multinational maritime defense coalition aimed at protecting freedom of navigation, international trade and energy supply routes through the Bab el-Mandeb Strait, the Red Sea and the Gulf of Aden.
The coalition comprises Saudi Arabia, Türkiye, Kuwait, Bahrain, Qatar, Jordan, Egypt, Pakistan, Djibouti, Somalia, Bangladesh, Yemen and the Comoros.
The Bab el-Mandeb Strait, which connects the Red Sea with the Gulf of Aden and the Indian Ocean, is one of the world’s most important maritime chokepoints for global trade and energy shipments.
Separately, the Houthis denied reports that they planned to impose transit fees on commercial vessels passing through the Bab el-Mandeb Strait, saying the waterway remains safe and open to international shipping and that their naval restrictions apply only to Saudi-linked vessels.
The statement followed a Reuters report, citing regional sources, that the Houthis were considering charging commercial ships transiting the strategic waterway.
The latest remarks helped ease concerns that shipping restrictions in the Red Sea could broaden after the Houthis declared what they described as a maritime blockade on Saudi Arabia on July 20 and later claimed attacks on Saudi-linked vessels.
Although tensions in the Red Sea remain part of the broader US-Iran conflict, the latest developments suggested that the risk of a wider disruption to regional oil shipments had eased, putting downward pressure on crude prices. Oil Prices Rise in Reaction to Saudi, U.S. Strikes Against Iran
