Crude prices fell from the previous session’s highs as President Trump considered easing sanctions on tankers carrying oil and refined products from Venezuela, Russia and Iran, OilPrice.com reported. The potential measure is aimed at relieving a worsening shortage of available vessels and reducing tanker freight rates that have reached record levels.
Brent was trading at $104.39 a barrel at the time of the report, below the level of more than $106 reached earlier in the week. West Texas Intermediate stood at $94.02 a barrel, having approached $96 in the preceding session. The retreat accompanied reports that Washington was examining relief for some vessels in the so-called shadow fleet.
According to OilPrice.com, the Persian Gulf war has squeezed tanker availability as ship-to-ship transfers have increased off Oman, outside the Strait of Hormuz. Freight costs also reflect the danger of Iranian drone or missile attacks. Together, those pressures have driven rates to record highs, adding to the cost of moving crude and fuels.
OilPrice.com cited a Reuters report quoting an unnamed US official who said the federal government was considering relaxing restrictions on certain sanctioned tankers. Under the arrangement described, shippers seeking to use one of those vessels would need to apply to the US Treasury Department. The proposal remained under consideration, rather than an announced lifting of sanctions.
Energy Aspects, cited by Reuters, said high freight costs were weakening demand for US crude. However, the consultancy questioned how much additional capacity sanctions relief would release. Most tankers sanctioned for Russian or Venezuelan connections had continued trading during the previous three months, limiting the likely improvement in vessel availability.
The discussions followed a Trump agreement with Russia involving exports of up to 4.8 million tons of diesel, OilPrice.com reported. US legislators and European political leaders criticised the arrangement as a potential source of funding for Russia’s war. Most analysts nevertheless regarded the volume as too small to materially alter diesel supply, including in the United States.