Brent crude price holds near $106 as US weighs easing shadow fleet sanctions
The Brent crude price was little changed on Thursday as investors weighed possible US steps to ease restrictions on the world’s “shadow fleet” of tankers, while conflict in the Middle East kept a geopolitical risk premium in the market.
Brent crude price settles at $105.92
The international benchmark settled down 14 cents, or 0.13 per cent, at $105.92 a barrel. US West Texas Intermediate futures settled up $2.88, or 3.03 per cent, at $97.97 a barrel, after a large US crude stock draw supported prices.
The shadow fleet discussions come days after President Donald Trump temporarily lifted sanctions on Russian diesel to ease a surge in global prices. The new talks centre on Washington potentially allowing “legal oil” to flow on previously sanctioned vessels, a US official said.
The Department of Energy said any move to ease sanctions on the shadow fleet would not help Russia move oil or oil products. The Treasury Department referred questions to the Department of Energy.
US stock draw beats expectations
US crude stocks and distillate inventories fell while petrol inventories rose last week, the Energy Information Administration said on Thursday. Crude inventories dropped by 8.6 million barrels to 415.6 million barrels in the week ended October 9, far above the 288,000-barrel draw analysts had expected in a Reuters poll.
The outsized draw helped lift WTI even as Brent drifted lower, showing how physical supply tightness and sanctions policy are pulling the two benchmarks in different directions.
What it means for Pakistan
Pakistan imports nearly all its petroleum, so the Brent crude price feeds directly into the domestic fuel market. The government revises petrol and diesel prices under a daily mechanism, and recent moves have already pushed petrol to Rs390.23 a litre, as we reported in our piece on the latest petrol price revision.
A Brent price above $105 keeps upward pressure on Pakistan’s oil import bill and on the rupee, which in turn affects inflation and the current account. If Washington eases shadow fleet restrictions and more “legal oil” reaches the market, that could cool prices. But continued Middle East tensions, including attacks on shipping near the Strait of Hormuz, are holding a risk premium in the market, as our coverage of the Hormuz ship sinking explains.
For now, traders are watching two things: whether the US moves on sanctions, and whether Middle East supply routes stay open.
FAQ
What is the current Brent crude price?
Brent settled at $105.92 a barrel on Thursday, down 14 cents, while US WTI rose to $97.97 after a bigger-than-expected US stock draw.
What is the shadow fleet?
It refers to tankers operating outside mainstream insurance and shipping channels, often used to move sanctioned oil. The US is discussing whether to let “legal oil” flow on previously sanctioned vessels.
How does the Brent crude price affect Pakistan?
Pakistan imports most of its fuel, so Brent moves feed into the oil import bill, the rupee and the daily petrol and diesel price revisions that set pump prices.
