Oil slips as traders weigh easing US curbs on shadow tanker fleet

what happened

Brent futures fell 41 cents, or 0.39%, to $105.51 a barrel by 00:12 GMT on Friday, while US WTI futures dropped 54 cents (0.55%) to $97.43. WTI had climbed more than 3% the previous day after a sizeable decline in US crude inventories, while Brent was roughly flat. Traders are also digesting a Thursday decision by the International Energy Agency to release over 20 million barrels of diesel, along with whatever remains of the record emergency stock release announced in March.

According to a US official speaking on Wednesday, the Trump administration is weighing relief for some shadow fleet tankers that have carried oil and refined products from Russia, Iran and Venezuela, with the aim of lowering record-high freight costs. The discussion follows Donald Trump's temporary suspension of sanctions on Russian diesel, a step that drew sharp criticism from Ukrainian President Volodymyr Zelenskiy, European governments and several Republican senators.

Geopolitical strains also lent support. Attacks around the waterway have intensified over the last ten days, with Iran signaling more strikes in response to a US blockade of its ports and tougher sanctions imposed last month. On Thursday the Houthis launched missiles at the presidential palace complex in Aden, killing two guards, while the Saudi-led coalition in Yemen listed dozens of attacks on Saudi infrastructure.

why it matters

The picture for markets is mixed: potential sanctions relief could add tanker capacity and ease freight rates, while the widening Yemen and Iran conflict keeps a geopolitical risk premium in prices. Haitong Futures argued that calmer Middle East tensions would do far more to cool the market than emergency stock releases, suggesting traders see geopolitics as the dominant driver right now.

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