Oil prices decline as investors assess sanctions relief and shipping attacks

Crude futures retreated on October 15, giving back gains from the preceding session as investors balanced potential U.S. measures to lower oil transport costs against attacks threatening shipping near the Strait of Hormuz.

At 1:16 a.m. GMT, Brent traded at $104.67 a barrel, a decline of $1.39, or 1.31%. U.S. West Texas Intermediate lost $1.02, or 1.07%, to trade at $94.07.

A U.S. official said the Trump administration was weighing sanctions relief for shadow fleet vessels, with discussions focused on letting ships previously subject to sanctions transport legally traded oil. Those vessels have carried petroleum from Russia, Iran and Venezuela, among other countries. The Iran war has disrupted maritime transport and lifted freight costs to record highs.

Maritime officials said two vessels — a container ship and a carrier transporting dry bulk cargo — sank near the strait after separate projectile attacks over a 24-hour period. Iran said it was escalating strikes in response to the U.S. port blockade and tougher sanctions. WTI had hit a three-week high after the Houthis struck Saudi Aramco's headquarters and Iran announced new methods of targeting ships.

Greater production in Russia and the Middle East has limited price gains. The International Energy Agency put Russian September crude output at 8.43 million bpd, up 65,000 barrels per day. It said Middle East Gulf producers increased September crude exports by 4.4 million bpd, bringing them to roughly 75% of prewar levels.

Market sources citing American Petroleum Institute data said U.S. crude stocks decreased by 11.1 million barrels for the week ending October 9. Distillate inventories declined, but gasoline stocks increased. The Energy Information Administration's official figures are scheduled for 12 p.m. EDT.