Oil prices eased as supply outlook and military tensions were assessed
Concerns regarding supply risks posed by attacks on vessels, combined with US efforts to ease sanctions on ships in a bid to lower oil transport costs, caused oil prices to fall by more than 1% on Thursday.
The US is considering easing sanctions on "shadow fleet" vessels.
As of 06:25 GMT, Brent crude futures fell $1.76 (1.7%) to $104.30 per barrel, while WTI crude futures dropped $1.06 (1.1%) to $94.03, reversing gains made in the previous session.
WTI had reached a three-week high in the previous session following attacks by the Iran-backed Houthis in Yemen on Saudi Aramco's headquarters, Tehran's targeting of vessels in the Strait of Hormuz, and announcements regarding new tactics to keep oil prices high.
According to data from Wednesday, a container ship and a bulk carrier sank after being struck by projectiles near the Strait of Hormuz within the last 24 hours.
Attacks around this waterway have surged significantly over the past 10 days, coinciding with Iran's announcement that it was intensifying its attacks in response to the US blockade of its ports and stricter sanctions imposed last month.
As tensions involving Iran disrupt maritime shipping and drive transport costs to record highs, the Trump administration is considering easing sanctions on the so-called "shadow fleet", vessels that transport oil and petroleum products from countries such as Russia, Iran, and Venezuela, in an effort to help lower prices.
Meanwhile, increased production from Russia and the Middle East has served to limit the rise in prices. In a statement on Wednesday, the International Energy Agency (IEA) reported that Russia’s crude oil production rose by 65,000 barrels per day in September, reaching 8.43 million barrels per day, though this remains 870,000 barrels per day lower than the same period last year.
The IEA also noted that crude oil exports from producers in the Middle East Gulf increased to 4.4 million barrels per day in September, reaching approximately 75% of pre-war levels.
Although there is no concrete evidence of a peace agreement in the near term, oil continues to reach buyers through alternative routes and logistical adjustments.
While these stopgap measures have helped prevent a more severe supply shock, they come with higher costs and leave global oil flows vulnerable to future disruptions.
According to data from the American Petroleum Institute (API), U.S. inventories of crude oil and distillate products fell last week, while gasoline stocks saw an increase.
Sources indicated that crude oil inventories dropped by 11.1 million barrels during the week ending October 9, a decline significantly larger than what analysts had anticipated. Despite a sharp decline in inventories, oil prices barely reacted. The fact that prices failed to rise, even in the face of news that could be considered positive for the market, suggests that investors are cautious about pushing prices any higher from current levels.
Official data from the U.S. Energy Information Administration (EIA) is expected to be released at 16:00 GMT, delayed by one day due to the Columbus Day holiday on Monday.
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