The oil price?fell Friday, but remained on course for a 5% monthly increase, as more'supplies' flowed into key maritime chokepoints. This was despite the?absence of any major breakthroughs in the talks between Iran and the United States.

Brent futures dropped $1.44 or 1.6% to $87.59 per barrel at 0658 GMT. U.S. West Texas Intermediate crude (WTI), however, fell $1.59 or 1.9% to $82 per barrel. Both benchmarks were expected to increase by about 20% on a monthly basis.

Daniel Hynes is a senior commodity analysts at ANZ. He said that the rising Middle -East tensions are being offset by increased flow in the Strait of Hormuz.

The strait is a major oil market focal point as it's been largely blockedaded since February 28, when the U.S. and Israel launched their war against Iran. Saudi Arabia is leading a coalition that aims to increase defence cooperation along the Bab el-Mandeb strait and in the Red Sea, as well as the Gulf of?Aden. These are all key chokepoints of energy supply.

Saudi Arabia's defence ministry stated that 14 countries, including Djibouti Egypt Pakistan Sudan and Turkey supported the multinational maritime defense coalition.

Last week, Houthi'militants' in Yemen, who are aligned with Iran, declared a naval blockade on Saudi Arabia. They threatened the Red Sea route as an alternative to the Strait of Hormuz for Saudi Arabian oil exports.

Priyanka Sackdeva, an analyst at Phillip Nova, says that although tanker 'traffic' has continued to pass through the Strait of Hormuz, the increased security risks have boosted insurance.premiums and freight costs, resulting in a geopolitical.risk premium embedded into oil prices.

Sachdeva stated that "while prices have eased off recent highs, the overall trend is still positive." (Reporting and editing by Clarence Fernandez; Sudarshan Varadhan)

(source: Reuters)