Crude oil prices cooled off with Brent Crude slipping to $104.9 per barrel levels on Thursday even as a cargo ship sank in the Strait of Hormuz after being stuck by an "unknown projectile", and Iran-backed Houthis continued to attack energy units in Saudi Arabia
The West Texas Intermediate traded 0.93% lower at around $94.19 levels. Elsewhere, an energy ceasefire declared between Russia and Ukraine by US President Donald Trump was allegedly flouted, after Moscow said Ukraine attacked two oil refineries, though Kyiv denied the claim.
Trump once again claimed that the Iran war is going to be "over very soon" while talking to reporters. The Republican President also said that he had to make an excursion down to Iran to take away their nuclear weapons.
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The Trump administration has proposed unfreezing some Russian government assets, which were frozen post Moscow's 2022 invasion of Ukraine in an effort to revive stalled peace negotiations. However, European officials have rejected the proposal, as per a report by the financial times.
In an unrelated statement, Trump admitted to have gone "a little too far" by taking out Iranian leaders during the war and Iran made him promise "not to take out any more."
Washington is also mulling easing sanctions on shadow fleet vessels in an effort to curb record-high global freight rates, Reuters cited a White House official as saying. The so-called shadow fleet vessels have transported oil and petroleum products from countries including Russia, Iran and Venezuela.
Traders are also critically assessing the prospect of diesel relief from Russia. US President Donald Trump's deal with Russia to supply 4.8 million metric tons, or nearly 36 million barrels total of diesel globally would suffice only a single-day of the cumulative demand, equivalent to 10 days of domestic American demand.
At the same time, the International Energy Agency (IEA) warned that constraints on diesel markets could continue well into 2027, with fresh attacks on Saudi Arabia threatening to derail a recovery on the supply side of the global oil market.
ALSO READ: Could Brent Crude Hit $125 A Barrel? Expert Flags Risks From Escalating Middle East Conflict
Brent Crude Versus WTI: A Widening Gap
The gap between the two global oil benchmarks has widened in recent period. On Wednesday, Brent futures were trading between $106 and $107 a barrel, whereas the West Texas Intermediate hovered near $94-$95.
Three months ago, they were barely apart. In early July, the gap was about $4. By Monday, the December contracts of the two oil derivative benchmarks stretched their gap to $13.85. The last time a similar scenario emerged was in March, when WTI's discount hit $12.63, the widest since 2014.
The explanation has less to do with oil than with ships. Brent is priced on seaborne barrels, so what it costs to move crude by sea ends up in its price. WTI is priced inland at Cushing, Oklahoma, and largely escapes it.
ALSO READ: Brent $106, WTI $94: What's Behind The Widening Gap Between Oil Benchmarks
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