Oil Declines More Than a Dollar as Washington Weighs Lifting Sanctions on Tankers

Oil prices retreated in early Asian trading on Thursday, with Brent crude futures sliding 1.31 percent to $104.67 per barrel, while American WTI crude dropped 1.07 percent to $94.07, erasing gains from the previous session.

The decline came despite mounting supply risks, as Iran announced it was intensifying operations against vessels in the Strait of Hormuz in response to the American embargo on its ports and tightened sanctions imposed last month. Maritime shipping officials reported that a container ship and a dry cargo vessel were struck by munitions and sank yesterday in separate incidents near the strait.

What dragged prices down, however, was a signal from the Trump administration that it is considering lifting sanctions on some tankers with the aim of reducing oil transport costs. WTI prices had reached their highest level in three weeks in the previous session following a Houthi attack on Saudi Aramco headquarters and Iran's announcement of resorting to new tactics to target vessels.

Trump is seeking through this approach to lower oil prices by easing sanctions imposed on Russia, Iran, and Venezuela, at a time when Iran is driving maritime shipping costs to record levels.