Oil prices fall after Saudi Arabia announces multinational Red Sea maritime coalition

Oil prices fell Thursday as Saudi Arabia led discussions on forming a multinational coalition to ensure freedom of navigation in the Red Sea.

Brent crude futures for September delivery closed at $86.88 per barrel on the ICE Futures Exchange, down 1.4 percent from the previous session. West Texas Intermediate futures for September delivery settled at $83.59 per barrel on the New York Mercantile Exchange, a decline of 1.0 percent.

Saudi Arabia announced plans to establish a 14-nation "multinational maritime defense coalition" to protect international shipping and energy supply routes in the Red Sea. Participants include Saudi Arabia and fellow Gulf Cooperation Council members Kuwait, Qatar and Bahrain, as well as Pakistan, Turkey, Egypt and Jordan.

Prices had briefly climbed during trading after the United States and Iran exchanged strikes on each other's military facilities, but reversed course after the coalition announcement.

Earlier, US Central Command (CENTCOM) disclosed that it had resumed airstrikes against Iran on Thursday — the first in six days — targeting Iranian military command facilities, missile and drone installations, and maritime assets.

Iran's Islamic Revolutionary Guard Corps (IRGC) said it struck US military bases in Jordan and Kuwait in retaliation for the American attacks.

Meanwhile, Iran is continuing negotiations with Oman over management of the Strait of Hormuz. Oman has reportedly proposed a stabilization arrangement under which Iran would oversee the northern shipping lane and Oman the southern lane, while guaranteeing free passage through both.

Hamad Hussein, chief climate and raw materials economist at Capital Economics, said the fact that Oman is negotiating with Iran "suggests progress is being made on reopening the Strait of Hormuz."