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Oil edges down as investors weigh possible US sanctions on ‘shadow fleet’

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Oil prices edged down on Friday morning as investors weighed Middle East risks and possible US steps to ease restrictions ​on the world’s "shadow fleet" of tankers.

Brent crude futures fell 41 cents, or ‌0.39%, to $105.51 a barrel by 0012 GMT, while US West Texas Intermediate crude futures CLc1 were down 54 cents, or 0.55%, to $97.43.

WTI settled up more than 3% on Thursday after a ​large US crude stock draw helped support prices, while Brent crude was little ​changed.

The International Energy Agency agreed on Thursday to release over 20 million ⁠barrels of diesel to the market and any oil remaining from a record ​release of emergency reserves pledged in March to boost supply and cool soaring prices.

During the ​previous trading session, oil prices rose overnight in a sign that "investors were dissatisfied with these measures," Haitong Futures in a note on Friday.

"What would really cool the oil market is an easing ​of tensions in the Middle East."

The Trump administration is considering lifting sanctions on some ​so-called shadow fleet vessels that have transported oil and petroleum products from countries including Russia, Iran ‌and ⁠Venezuela, in an effort to reduce record-high global freight rates, a US official said on Wednesday.

The discussions come days after President Donald Trump temporarily lifted sanctions on Russian diesel fuel, a move met with a torrent of criticism from Ukrainian President Volodymyr ​Zelenskiy, European countries ​and some of ⁠Trump's fellow Republicans in the US Senate.

Meanwhile, escalating conflict between Saudi Arabia and Yemen's Houthis and renewed attacks on ships in ​the region supported prices.

Attacks around the waterway have surged over ​the past ⁠10 days, with Iran saying it was stepping up strikes in response to the US blockade of its ports and tougher sanctions introduced last month.

The Houthis fired missiles at the ⁠presidential ​palace complex in the southern city of Aden ​on Thursday, killing two guards, while the Saudi-led coalition in Yemen detailed dozens of attacks on Saudi infrastructure ​in the escalating conflict.

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