Brent crude slid to $105.40 on Friday, shedding 0.52%, while WTI crude dropped 66 cents to $97.31. The retreat follows a volatile Thursday session where WTI surged over 3% on reports of falling US inventories. Investors are currently pricing in a potential regulatory pivot: the Trump administration is actively debating lifting restrictions on the 'shadow fleet' of tankers that transport oil from Russia, Iran, and Venezuela.
A US official confirmed the deliberations to Reuters, noting the move aims to crush record-high global freight rates. This proposal follows President Donald Trump’s recent, controversial temporary lifting of sanctions on Russian diesel fuel—a decision that drew sharp criticism from Ukrainian President Volodymyr Zelenskiy, European allies, and factions within the US Senate. If enacted, this policy shift would theoretically increase supply flexibility, though market analysts remain skeptical of its immediate impact on physical barrels.
Efforts to cool the market have been aggressive but incomplete. The International Energy Agency agreed on Thursday to release more than 20 million barrels of diesel, stacking onto the record emergency reserve release announced in March. Despite this massive injection of supply, prices remain stubbornly high due to persistent geopolitical friction. The Middle East is the primary driver, with the Saudi-Yemeni conflict intensifying. Iran has vowed to escalate strikes in response to the US blockade of its ports and stricter sanctions imposed last month.
The violence is no longer contained to the waterways. Attacks around key shipping lanes have spiked over the past 10 days. On Thursday, the Houthis fired missiles at the presidential palace complex in Aden, killing two guards. Simultaneously, the Saudi-led coalition reported dozens of attacks on Saudi infrastructure. With supply chains under physical threat and diplomatic channels strained, the market faces a binary risk: either US sanctions relief materializes to dampen prices, or the conflict widens, pushing crude deeper into triple digits.