Oil prices dropped on Thursday as traders assessed growing threats to shipping through the Strait of Hormuz against a possible US move to ease sanctions on oil-carrying vessels. Brent crude fell 1.6% to USD 104.42 a barrel, while US West Texas Intermediate declined 1% to USD 94.11 by 03:37 GMT.
WTI had climbed to a three-week high in the previous session following an attack by Houthi forces on Saudi Aramco's headquarters. Iran also announced new tactics to target vessels in the Strait of Hormuz and sustain pressure on oil prices. Maritime officials reported on Wednesday that a container ship and a dry bulk carrier sank near the strait after separate projectile strikes within 24 hours. Attacks around the strategic waterway have intensified over the past 10 days.
Iran has said it is increasing strikes in response to a US blockade of its ports and stricter sanctions imposed last month. The conflict has disrupted maritime trade and pushed freight costs to record highs. The Trump administration is considering easing restrictions on shadow-fleet vessels that have carried oil and petroleum products from Russia, Iran and Venezuela.
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Higher output from Russia and Middle Eastern producers has helped contain the market's rise. Russian crude production increased by 65,000 barrels per day in September to 8.43 million bpd, although it remained 870,000 bpd below the year-earlier level, the International Energy Agency said. The agency also reported that crude exports from Middle East Gulf producers rose by 4.4 million bpd in September, reaching around 75% of prewar levels.
US crude inventories fell by 11.1 million barrels in the week ended October 9, according to American Petroleum Institute data cited by market sources. Gasoline stocks increased, while distillate inventories declined. Official US Energy Information Administration figures were scheduled for release at 16:00 GMT on Thursday, following a one-day delay linked to the Columbus Day holiday.