Oil prices dipped slightly on Friday morning as investors balanced concerns over Middle East tensions with potential U.S. moves to ease restrictions on the so-called 'shadow fleet' of tankers. Brent crude futures dropped 41 cents, or 0.39%, to $105.51 per barrel, while U.S. West Texas Intermediate crude futures fell 54 cents, or 0.55%, to $97.43.
The price decline came after a strong gain in the previous session, where WTI settled over 3% higher due to a significant draw in U.S. crude stockpiles. Brent crude remained largely unchanged following the International Energy Agency's decision to release more than 20 million barrels of diesel and remaining emergency reserves to cool soaring prices.
Analysts noted that investors were dissatisfied with these supply measures, with Haitong Futures stating that 'what would really cool the oil market is an easing of tensions in the Middle East.' The Trump administration is reportedly considering lifting sanctions on some shadow fleet vessels that transport oil from Russia, Iran, and Venezuela to address record-high global freight rates.
Meanwhile, escalating conflict between Saudi Arabia and Yemen's Houthis, along with renewed attacks on ships in the region, continued to support oil prices. Iran has escalated strikes in response to U.S. sanctions, while the Houthis targeted the presidential palace complex in Aden, killing two guards. The Saudi-led coalition also reported dozens of attacks on Saudi infrastructure, further heightening regional tensions.