Oil prices finished lower on Thursday following a volatile trading session as markets balanced continued military tensions in the Middle East against tentative diplomatic efforts to improve security for regional shipping routes. While geopolitical risks remained elevated, optimism surrounding proposals to strengthen maritime protection in the Red Sea helped ease some supply concerns.
Brent crude settled at $89.03 per barrel, down 1.88%, while West Texas Intermediate (WTI) declined 1.03% to $83.59 per barrel. Both benchmarks traded sharply higher earlier in the session as renewed exchanges between U.S. and Iranian forces briefly heightened fears of further supply disruptions.
Attention remained focused on the region’s key shipping corridors. Saudi Arabia proposed a multinational maritime security coalition to protect commercial traffic through the Bab el-Mandeb Strait, the Red Sea, and the Gulf of Aden following continued threats from Yemen’s Houthi forces. At the same time, Iran and Oman continued discussions regarding management of the Strait of Hormuz, although no agreement has been reached to fully restore normal shipping through the waterway.
Despite ongoing military activity across the region, markets found some reassurance from signs that diplomatic discussions remain active. However, continued attacks on energy infrastructure, disruptions to Black Sea oil exports, and ongoing reductions in tanker traffic through major maritime chokepoints suggest that geopolitical risk premiums are likely to remain embedded in oil prices until regional security improves more substantially.