Oil prices fell on Friday, July 31, 2026, as increased crude flows through key maritime chokepoints eased supply concerns, despite no major breakthrough in talks between the United States and Iran.
Brent crude futures dropped $1.44, or 1.6 per cent, to $87.59 per barrel by 0658 GMT, while U.S. West Texas Intermediate (WTI) crude declined $1.59, or 1.9 per cent, to $82 per barrel.
Despite Friday’s decline, both benchmarks remain on track to post monthly gains of about 20 per cent.
Senior commodity analyst at ANZ, Daniel Hynes, said crude oil prices were edging lower as heightened tensions in the Middle East were being offset by signs of increased tanker flows through the Strait of Hormuz.
The Strait of Hormuz, which carries about one-fifth of global shipments of crude oil and liquefied natural gas, has remained a major focus for global energy markets after being largely blockaded following the February 28 launch of the U.S.-Israeli war on Iran.
Meanwhile, Saudi Arabia is leading efforts to establish a multinational maritime defence coalition aimed at strengthening security in the Bab el-Mandeb Strait, the Red Sea and the Gulf of Aden—critical routes for global energy supplies.
According to the Saudi defence ministry, 14 countries, including Djibouti, Egypt, Pakistan, Sudan and Turkey, have expressed support for the coalition.
Adding to regional uncertainty, Iran-backed Houthi militants in Yemen last week declared a naval blockade on Saudi Arabia, threatening the Red Sea shipping route, a key alternative to the Strait of Hormuz for Saudi oil exports.
Priyanka Sachdeva, an analyst at Phillip Nova, said that although tanker traffic has continued through both the Strait of Hormuz and the Red Sea, heightened security risks have driven up freight costs and insurance premiums, keeping a significant geopolitical risk premium embedded in oil prices.
“While prices eased from recent highs, the broader trend remains constructive,” Sachdeva said.
