Brent crude oil prices fell by approximately 1% in Thursday’s trading session after the United States announced plans to ease policies regarding tankers linked to Russia’s "shadow fleet," alleviating concerns over high shipping costs and fuel supplies. Brent dropped by US$1.03, or 0.97%, to US$105.03 per barrel. Conversely, U.S. West Texas Intermediate (WTI) crude rose by US$1.04, or 1.09%, to US$96.13 per barrel, as the market anticipated a significant decline in U.S. crude oil inventories.
The pressure on Brent emerged following the U.S. government's consideration of easing sanctions on several Russian tankers previously subject to restrictions. This move has the potential to lower transportation costs and improve the distribution of diesel fuel. Previously, former President Donald Trump had also temporarily lifted sanctions on Russian diesel fuel in an effort to curb rising global energy prices.
Nevertheless, the decline in oil prices remains tempered by escalating geopolitical risks in the Middle East. The conflict between Saudi Arabia and the Houthi group in Yemen persists, while attacks in the vicinity of the Strait of Hormuz have intensified. A container ship and a cargo vessel reported sinking after being struck by projectiles in separate incidents, heightening concerns regarding the stability of global energy trade routes.
Supply risks also stem from the Russia-Ukraine conflict. Ukraine has once again targeted Russian energy facilities, including an oil refinery in the Ryazan region. Meanwhile, Spain plans to draw approximately 4.4 million barrels from its strategic reserves in October—a move that aligns with broader international efforts to bolster supply while energy markets continue to face various disruptions. From the United States, data from the American Petroleum Institute (API) shows that crude oil inventories fell by 11.1 million barrels for the week ending October 9—a decline significantly larger than what analysts had anticipated. The market will now look to official data from the Energy Information Administration (EIA) to confirm this drop and provide an updated picture of the U.S. oil supply situation.