Oil prices fell more than 1% on Thursday as traders weighed escalating attacks near the Strait of Hormuz against signals the US could ease sanctions on some ships to cut petroleum transport costs.
Brent slid $1.64, or 1.6%, to $104.42 a barrel at the time of writing, while US West Texas Intermediate lost 98 cents, or 1%, to $94.11, giving back gains from the previous session.
WTI had touched a three‑week high on Wednesday after the Houthis struck Saudi Aramco’s headquarters and Iran vowed new tactics to target vessels in the Hormuz chokepoint to keep prices elevated.
A container ship and a dry‑bulk carrier both sank near the strait in the past 24 hours after being hit by projectiles in separate incidents, maritime officials said.
Tehran says the uptick in strikes is a response to a US blockade of its ports and tougher sanctions rolled out last month.
Washington weighs a sanctions workaround
With the Iran war snarling shipping lanes and freight costs at record highs, the Trump administration is considering letting previously sanctioned “shadow‑fleet” tankers carry “legal oil,” a US official said.
The talks aim to ease prices by expanding the pool of vessels able to move crude and products from countries including Russia, Iran and Venezuela.
Extra barrels from Russia and the Middle East also cooled the market. Russia’s crude output rose 65,000 bpd in September to 8.43 million bpd, still 870,000 bpd below a year earlier, the IEA said. Exports from Middle East Gulf producers climbed by 4.4 million bpd in September to around 75% of prewar levels, it added.
“While there is little concrete evidence of a near-term peace deal, oil continues to find its way to buyers through alternative routes and logistical arrangements,” Priyanka Sachdeva, head of market insights at Phillip Nova, wrote in a client note.
“These workarounds have helped prevent a more severe supply shock, although they come at a higher cost and leave global flows vulnerable to further disruption.” - Priyanka Sachdeva
US stocks draw, but bulls hold back
American Petroleum Institute data showed US crude inventories tumbled 11.1 million barrels in the week ended October 9, with distillates down and gasoline stocks up. The draw far exceeded analyst expectations, yet futures barely budged.
“Despite the sharp inventory draw, oil prices barely reacted. The failure to rise on bullish news suggests investors are cautious about chasing prices higher at current levels,” Haitong Futures said Thursday.
For now, supply is still moving, just more expensively and with greater risk, leaving oil pinned between security shocks and policy moves designed to blunt them.
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