Oil falls after Saudi Arabia proposes maritime coalition to safeguard shipping routes

Oil prices declined during Thursday's trading after Saudi Arabia proposed the formation of an international maritime coalition to protect key global trade routes amid continued attacks on commercial shipping in the Red Sea and the Strait of Hormuz by Iran and its allies.

In trading, Brent crude futures fell about 2% to settle at $89.03 per barrel, while US West Texas Intermediate (WTI) crude declined about 1% to close at $83.59 per barrel.

Coalition to protect trade routes

Saudi Arabia's Ministry of Defense said more than 40 countries participated in a meeting focused on strengthening maritime defense cooperation and coordinating efforts to safeguard the security of vital shipping lanes, according to an official statement.

The initiative follows last week's announcement by Yemen's Iran-backed Houthi movement of a maritime blockade against Saudi Arabia, while Iran has continued targeting vessels transiting the Strait of Hormuz.

Geopolitical tensions keep markets on edge

Brent crude had surged about 8% during Wednesday's session as fighting intensified across the Middle East after the United States launched a broad wave of airstrikes against targets inside Iran in response to missile attacks on US forces in the region.

In response, Iran's Islamic Revolutionary Guard Corps threatened further escalation following the US strikes.

In a separate development, Egypt said two vessels were attacked by a drone at the Mediterranean port of Damietta, home to a major liquefied natural gas export terminal.

The United States had paused military strikes against Iranian targets for two weeks over the previous weekend to allow diplomatic efforts to continue. However, only hours before the operation, US President Donald Trump announced that he intended to launch powerful strikes against Iran.

US Central Command (CENTCOM) described the operation as a "strong response" to the Iranian attacks targeting US forces on Tuesday, adding that the mission lasted around two hours and struck dozens of Revolutionary Guard targets.

OPEC+ meeting

Meanwhile, investors are awaiting Sunday's OPEC+ meeting, where the producer alliance is widely expected to approve an output increase of about 188,000 barrels per day for September.