GLOBAL — Oil prices declined on Thursday as traders evaluated the possibility of additional Russian oil supplies reaching buyers through tankers that had previously been sanctioned. The potential shift in US policy helped ease concerns over shipping expenses and fuel availability, although persistent geopolitical tensions limited the market’s losses.
Brent crude futures dropped $2.28, or 2.2%, to $103.78 per barrel by 0729 GMT. US West Texas Intermediate crude futures fell $1.34, or 1.4%, to $93.75 per barrel, reversing gains from the previous session.
The decline followed reports that US officials were considering permitting legally authorized oil shipments aboard certain Russian vessels previously subject to sanctions. PVM Oil analyst John Evans said the proposal could lower freight rates and provide greater flexibility for diesel shipments.
The discussions followed President Donald Trump’s temporary lifting of sanctions on Russian diesel fuel several days earlier, a move intended to ease a global surge in prices. The latest proposal centers on allowing what a US official described as legal oil to be transported aboard vessels that had previously faced sanctions.
A relaxation of shipping restrictions could affect the international transportation costs of energy products. Freight expenses have become a key factor in fuel markets, particularly as geopolitical tensions disrupt established maritime routes.
However, instability in the Middle East continued to provide support for oil prices. The conflict involving Saudi Arabia and Yemen’s Houthis intensified, while attacks on commercial vessels heightened concerns over the security of critical maritime corridors.
Maritime officials reported that a container ship and a dry bulk carrier sank near the strait after being hit by projectiles in separate incidents. The incidents came amid an increase in attacks across the surrounding waterway over the preceding 10 days.
Iran said it was intensifying its strikes in response to a US blockade of its ports and stricter sanctions imposed the previous month. The developments have kept traders concerned about the risk of additional disruptions to energy transportation.
In a note, MUFG analysts said the ongoing conflict between Saudi Arabia and the Houthis was sustaining a geopolitical premium in oil markets. They also observed that energy infrastructure had not been targeted in the preceding several days.
Meanwhile, Ukraine resumed strikes against Russian refineries, targeting a facility in the Ryazan region. The attack followed Ukrainian President Volodymyr Zelenskiy’s criticism of what he called a dangerous withdrawal of US intelligence.
US inventory data also shaped market expectations. Sources citing preliminary figures from the American Petroleum Institute said crude oil inventories declined by 11.1 million barrels in the week ended October 9. The drop was substantially larger than analysts surveyed by Reuters had anticipated. Distillate inventories also decreased, while gasoline stocks rose.
The US Energy Information Administration was scheduled to publish its official inventory figures at 12 p.m. EDT (1600 GMT) on Thursday. The release had been postponed by one day because of the Columbus Day holiday on Monday.
For businesses and consumers, the contrasting developments underscore continued uncertainty in energy markets. Greater flexibility for Russian oil shipments could reduce transportation pressures, but attacks on shipping and threats to energy infrastructure remain significant risks for prices.
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