Oil prices edged down on Friday as traders weighed the possibility of the US easing restrictions on certain oil tankers against escalating geopolitical tensions in the Middle East. The prospect of additional supplies entering the market offered some relief, although concerns over shipping disruptions continued to support crude prices. Brent crude futures declined 41 cents, or 0.39 per cent, to $105.51 per barrel. US West Texas Intermediate (WTI) crude futures dropped 54 cents, or 0.55 per cent, to $97.43 per barrel on October 16.
The movement followed a strong session for WTI on Thursday, when prices settled more than 3 per cent higher after US data showed a substantial drawdown in crude inventories. Brent, meanwhile, ended the session with little change.
Both contracts came under pressure as investors considered whether Washington could take steps to ease supply constraints by relaxing sanctions on selected oil tankers. However, the market remains sensitive to developments in the Middle East, where attacks on vessels and escalating hostilities have increased uncertainty around the movement of crude and petroleum products.
US Considers Easing Restrictions On Shadow Fleet Tankers
The Donald Trump administration is discussing the possibility of lifting sanctions on some vessels associated with the so-called shadow fleet, a US official said on Wednesday. These tankers have transported crude oil and petroleum products from countries such as Russia, Iran and Venezuela.
Shadow fleet vessels are commonly used to move oil from sanctioned countries, often operating outside the conventional Western shipping, insurance and regulatory networks.
The proposed easing of restrictions is intended to help reduce global freight costs, which have climbed to record levels. If implemented, the move could influence shipping availability and the cost of transporting oil around the world.
The discussions come days after US President Donald Trump temporarily lifted sanctions on Russian diesel fuel. The decision attracted criticism from Ukrainian President Volodymyr Zelenskiy, European countries and some Republican senators in the US.
Separately, the International Energy Agency (IEA) agreed on Thursday to release more than 20 million barrels of diesel into the market, alongside any remaining oil from the record emergency stock release announced in March. The additional supplies are intended to ease shortages and contain rising energy prices.
Middle East Conflict Keeps Supply Concerns Alive
Despite the potential for additional supply, tensions in the Middle East remain a major factor influencing oil market movements. The intensifying conflict involving Saudi Arabia and Yemen’s Houthis, coupled with fresh attacks on shipping, has kept traders alert to the risk of further disruptions.
Attacks in and around the region’s key waterways have increased over the past 10 days. Iran has said it is stepping up strikes in response to the US blockade of its ports and tighter sanctions imposed last month.
On Thursday, the Houthis launched missiles at the presidential palace complex in Aden, southern Yemen, killing two guards. The Saudi-led coalition also reported dozens of attacks targeting Saudi infrastructure as the conflict escalated.
Any disruption to shipping routes could delay crude deliveries, raise transportation costs and tighten supplies in international markets. These risks continue to offset some of the downward pressure created by the prospect of additional oil and fuel supplies.
