Oil Prices Fall Despite Middle East Tensions
Crude benchmarks retreat as investors assess supply recovery, shipping disruptions and possible easing of US sanctions on oil vessels.
Global oil prices fell by more than 1% on Thursday, October 15, as investors balanced escalating security risks in the Middle East against signs of improving oil supply and potential changes to US sanctions policy.
Brent crude futures declined by $1.64, or 1.6%, to $104.42 per barrel, while US West Texas Intermediate (WTI) crude futures dropped by 98 cents, or 1%, to $94.11 by 0337 GMT, Reuters reported. The declines reversed gains recorded in the previous session.
Market concerns remain focused on the Strait of Hormuz, a critical route for global energy shipments. Maritime officials reported that a container ship and a dry bulk carrier sank near the strait within 24 hours after being struck by projectiles. The incidents followed increased attacks linked to the widening regional conflict.
At the same time, the US administration is considering easing sanctions on certain vessels associated with transporting oil from countries including Russia, Iran and Venezuela. The proposal aims to allow more oil shipments and reduce transport costs, according to a US official cited by Reuters.
Higher output and recovering exports have also helped limit upward pressure on crude prices. Russia’s oil production rose by 65,000 barrels per day in September to 8.43 million barrels per day, although it remained below the year-earlier level. The International Energy Agency also reported that crude exports from Middle Eastern Gulf producers increased by 4.4 million barrels per day in September, reaching around 75% of pre-war levels.
US crude inventories fell by 11.1 million barrels in the week ended October 9, according to data from the American Petroleum Institute cited by market sources. The decline was substantially larger than analysts had expected, but prices showed little response. Official figures from the US Energy Information Administration were due later on Thursday.
The muted reaction to the inventory decline suggests traders remain cautious about buying crude at elevated prices while the outlook for supply and regional security remains uncertain. Further attacks on shipping or energy infrastructure could disrupt recovering flows, while additional supply and changes to sanctions could ease some market pressure.