Oil prices fall more than 1%, Hormuz risks and sanction easing become focus

1. Oil prices fell by more than $1 in early trading on Thursday, as investors weighed supply risks from attacks on shipping in the Strait of Hormuz and the United States' measures to reduce oil transport costs by relaxing certain vessel sanctions. U.S. crude oil is currently down 1.23%, trading near $93.92 per barrel, while Brent crude is down 1.58%, trading at $104.41 per barrel, with both giving back gains from the previous trading day.2. Previously, Houthi forces attacked Saudi Aramco headquarters, and Iran stated it would take new tactics to target ships in the Strait of Hormuz and thus maintain high oil prices, pushing WTI to a three-week high in the prior trading session. Maritime officials said on Wednesday that in the past 24 hours, a container ship and a bulk carrier sank after being hit by projectiles near the Strait of Hormuz.4. There has been a marked increase in attacks around the Strait of Hormuz over the past 10 days. Iran said these actions are in response to the U.S. blockade of its ports and the tougher sanctions implemented last month. A U.S. official revealed on Wednesday that the Trump administration is considering easing sanctions on vessels in the so-called “shadow fleet,” which have transported oil and products from Russia, Iran, and Venezuela, in order to alleviate global freight rates that have reached record highs.5. Increased production in Russia and the Middle East is curbing oil price rises. The International Energy Agency (IEA) said on Wednesday that Russia’s crude oil output in September increased by 65,000 barrels per day to reach 8.43 million barrels per day, but this remains about 870,000 barrels per day lower compared to a year ago. The IEA also stated that crude exports from Middle East Gulf producers increased by 4.4 million barrels per day in September, having recovered to about 75% of pre-war levels.6. Data from the American Petroleum Institute (API) showed U.S. crude oil and distillate inventories fell last week, while gasoline inventories rose. The U.S. Energy Information Administration (EIA) will release official inventory data on Thursday.