Oil Price Today (October 16): Crude oil dips to $105 as Trump mulls easing restrictions on sanction-facing nations. What’s next?

Oil prices edged lower on Friday as investors assessed risks in the Middle East alongside potential US moves to ease restrictions on the world's so-called shadow fleet of tankers to temper liquid gold prices.

The shadow fleet is a group of oil tankers used to transport oil from countries facing sanctions, particularly Russia, Iran and Venezuela, often outside the conventional Western shipping, insurance and regulatory system.

Crude oil price on October 16

Brent crude futures fell 41 cents, or 0.39%, to $105.51 a barrel, while US West Texas Intermediate crude futures declined 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 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, a US official said on Wednesday. The move is aimed at bringing down global freight rates, which have reached record highs.

The discussions follow President Donald Trump's temporary lifting of sanctions on Russian diesel fuel days earlier. The decision drew strong criticism from Ukrainian President Volodymyr Zelenskiy, European countries and some of Trump's fellow Republicans in the US Senate.

The International Energy Agency (IEA) agreed on Thursday to release more than 20 million barrels of diesel into the market, along with any oil left over from the record emergency reserve release pledged in March. The move aims to increase supply and rein in soaring prices.

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Tensions persist

Meanwhile, the escalating conflict between Saudi Arabia and Yemen's Houthis, alongside renewed attacks on ships in the region, continued to support oil prices. Attacks around the waterway have increased over the past 10 days, with Iran saying it was intensifying 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 Aden, a city in southern Yemen, on Thursday, killing two guards. The Saudi-led coalition in Yemen also reported dozens of attacks on Saudi infrastructure as the conflict intensified.

Where are prices headed?

Uncertainty over how the conflict will ultimately unfold remains a major concern for markets. JPMorgan analysts said they could not model the war's eventual trajectory. At the start of the conflict, the bank had assumed the US administration would avoid crossing certain economic thresholds. Seven months into the war, many of those thresholds had been crossed, while a clear exit strategy remained absent.

The threat of further supply disruptions has also raised the prospect of higher oil prices. Daan Struyven, co-head of global commodities research at Goldman Sachs, said recent attacks highlighted how disruptions to shipping could spread and intensify.

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Goldman Sachs has outlined a scenario in which oil prices could climb to $120 a barrel if attacks on vessels in the Middle East escalate. If exports return to normal, the bank expects prices to fall back towards $80 a barrel. Struyven said shipping risks had become a key driver of oil prices, adding that Goldman Sachs sees significant upside potential for crude. The bank also expects natural gas and refined product prices to rise, with supply shocks affecting gas and fuels larger than those in the crude oil market.

Disclaimer: This article has been written by Veer Sharma, who is not a SEBI-registered Research Analyst or an Investment Adviser. Veer Sharma and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here.