By Boluwatife Oshadiya | July 31, 2026, 11:39 AM
Key Points
- Brent crude falls 1.9% to $85.26 per barrel as geopolitical risk premium eases
- Saudi Arabia and 13 other countries launch a maritime coalition to secure key shipping routes
- Houthi assurances over safe passage through the Bab el-Mandeb Strait help calm oil markets
Main Story
Global oil prices declined on Friday after concerns over potential disruptions to critical Middle East shipping routes eased following the launch of a multinational maritime security coalition led by Saudi Arabia.
Brent crude futures for October delivery fell 1.9% to $85.26 per barrel from the previous close of $86.88, while US benchmark West Texas Intermediate (WTI) crude dropped 2.1% to $81.86 per barrel, down from $83.59.
The decline came after Saudi Arabia and 13 other countries announced a maritime defence coalition aimed at safeguarding freedom of navigation and protecting international trade and energy supply routes through the Bab el-Mandeb Strait, the Red Sea and the Gulf of Aden.
Member countries include Saudi Arabia, Türkiye, Kuwait, Bahrain, Qatar, Jordan, Egypt, Pakistan, Djibouti, Somalia, Bangladesh, Yemen and the Comoros.
The Bab el-Mandeb Strait is one of the world’s most strategically important maritime chokepoints, serving as a vital corridor linking the Red Sea to the Gulf of Aden and the Indian Ocean. Millions of barrels of crude oil and petroleum products pass through the route daily, making any threat to navigation a key driver of global energy prices.
Market sentiment also improved after Yemen’s Iran-backed Houthi movement denied reports that it intended to impose transit fees on commercial vessels using the waterway.
“The Bab el-Mandeb Strait remains safe and open to international shipping, and our naval restrictions apply only to Saudi-linked vessels,” the Houthi group said in a statement.
The clarification followed a Reuters report suggesting the group was considering levying charges on commercial ships passing through the strategic waterway.
Although tensions linked to the broader US-Iran conflict remain elevated, analysts said the latest developments have reduced fears of a wider disruption to regional oil exports, easing the geopolitical premium that had recently supported crude prices.
What’s Being Said
Saudi Arabia said the newly formed maritime coalition is designed to protect international trade, freedom of navigation and global energy supply routes across the Red Sea corridor.
Meanwhile, the Houthi movement insisted in a statement that “the Bab el-Mandeb Strait remains safe and open to international shipping,” adding that its naval operations remain limited to Saudi-linked vessels.
What’s Next
- Markets will continue monitoring security developments across the Red Sea and Bab el-Mandeb Strait for any signs of renewed supply disruptions.
- Investors will also watch for further developments in US-Iran diplomatic engagements, which could influence geopolitical risk and oil prices.
- OPEC+ production policy and upcoming global inventory data are expected to remain key drivers of crude price movements in the coming weeks.
The Bottom Line: The formation of a multinational maritime coalition has eased immediate concerns over disruptions to one of the world’s busiest energy trade routes. While geopolitical risks in the Middle East remain elevated, the reduced likelihood of a broader supply shock has weakened the risk premium that recently pushed crude prices higher.
