Global oil prices fell by around 2% on Thursday as the United States considered relaxing sanctions on some Russian oil tankers, raising expectations that additional supplies could reach the market and ease pressure on prices.
Brent crude futures dropped by $2.28, or 2.2%, to $103.78 per barrel by 0729 GMT, while US West Texas Intermediate (WTI) crude declined by $1.34, or 1.4%, to $93.75 per barrel. The decline reversed gains recorded during the previous trading session.
The price movement followed reports that Washington was considering easing restrictions on some vessels associated with Russia’s so-called “shadow fleet”, which transports oil outside conventional shipping and regulatory arrangements.
A US official disclosed the discussions on Wednesday. According to PVM Oil analyst John Evans, relaxing the restrictions could reduce shipping costs and provide greater flexibility for diesel deliveries.
The discussions came days after President Donald Trump temporarily lifted sanctions on Russian diesel fuel in an effort to ease a global price surge. The latest proposal reportedly centres on allowing what the US official described as “legal oil” to be transported using vessels that had previously been sanctioned.
Despite the decline, oil prices continued to receive support from geopolitical tensions in the Middle East, particularly the escalating conflict involving Saudi Arabia and Yemen’s Houthi movement, alongside renewed attacks on commercial shipping.
Maritime officials reported on Wednesday that a container ship and a dry bulk carrier had sunk near the Strait after separate incidents in which the vessels were struck by projectiles within a 24-hour period.
Attacks around the strategic waterway have increased over the past 10 days, with Iran saying it was intensifying strikes in response to a US blockade of its ports and tougher sanctions introduced the previous month.
The continued security concerns have kept traders cautious about potential disruptions to oil supplies and shipping routes. Analysts at MUFG said the conflict between Saudi Arabia and the Houthis was maintaining a geopolitical risk premium in oil markets, although energy infrastructure had not been attacked in recent days.
Meanwhile, Ukraine has resumed strikes against Russian oil refineries, targeting a facility in the Ryazan region. The attack followed Ukrainian President Volodymyr Zelenskiy’s criticism of what he described as a “dangerous” withdrawal of US intelligence support.
Developments involving Russian energy infrastructure remain another factor influencing oil market expectations, as attacks on refineries could affect fuel production and supply availability.
In the United States, preliminary industry data indicated that crude oil and distillate inventories declined last week, while gasoline stocks increased.
Sources cited figures from the American Petroleum Institute showing that US crude inventories fell by 11.1 million barrels during the week ended October 9. The reduction was significantly larger than analysts surveyed by Reuters had anticipated.
Official inventory figures from the US Energy Information Administration were scheduled for release at 12 p.m. Eastern Daylight Time (1600 GMT) on Thursday. The report had been delayed by one day because of the Columbus Day holiday on Monday.
The combination of possible easing of Russian oil restrictions, renewed attacks on shipping and energy infrastructure, and changing US fuel inventories continues to shape the outlook for global oil prices.
