Saudi Consumer Spending Tops $3 Billion Amid Strong Food and Beverage Demand

Oil Slips Over 1 Percent as Hormuz Attacks Meet US Move to Ease Shipping Costs

RIYADH: Oil prices fell more than 1 percent on Thursday as investors weighed the risk to supply from attacks on shipping near the Strait of Hormuz against US efforts to cut petroleum shipping costs by easing sanctions on vessels.

Prices Reverse Earlier Gains

Brent crude futures fell $1.76, or 1.7 percent, to $104.30 a barrel by 09:25 a.m. Saudi time. US West Texas Intermediate futures dropped $1.06, or 1.1 percent, to $94.03. Both contracts reversed gains from the previous session, when WTI reached a three-week high.

That rise followed two developments. Yemen’s Iran-backed Houthis attacked Saudi Aramco’s headquarters, and Tehran said it was deploying new tactics to target ships in the Strait of Hormuz and keep oil prices high.

Ships Sink Near the Strait

A container ship and a dry bulk carrier both sank near the strait within 24 hours after being hit by projectiles in separate incidents, maritime officials said on Wednesday. Attacks around the waterway have surged over the past 10 days. Iran says it is stepping up strikes in response to the US blockade of its ports and the tougher sanctions introduced last month.

Washington Looks at Freight Costs

The Iran war has disrupted shipping and pushed freight costs to record highs. In response, the Trump administration is considering easing sanctions on so-called shadow-fleet vessels, which have carried oil and petroleum products from countries including Russia, Iran and Venezuela, a US official said on Wednesday.

The talks centre on the US potentially allowing “legal oil” to flow on previously sanctioned vessels. The aim is to help bring prices down by widening the pool of ships available to move cargoes.

Supply From Russia and the Gulf Keeps a Lid on Prices

Higher output from Russia and the Middle East has helped limit price gains. The International Energy Agency said Russia’s crude production rose by 65,000 barrels per day in September to 8.43 million, though it remained 870,000 barrels per day lower than a year earlier.

The agency also said crude exports from Middle East Gulf producers rose by 4.4 million barrels per day in September, reaching about 75 percent of prewar levels.

Priyanka Sachdeva, head of market insights at Phillip Nova, said in a client note that there is little concrete evidence of a near-term peace deal, yet oil continues to find its way to buyers through alternative routes and logistical arrangements. These workarounds, she said, have helped prevent a more severe supply shock, although they come at a higher cost and leave global flows open to further disruption.

US Stocks Draw Down

In the United States, crude oil and distillate inventories fell last week, while gasoline stocks rose, market sources said on Wednesday, citing American Petroleum Institute data. Crude stocks fell by 11.1 million barrels in the week ended Oct. 9, a much bigger draw than analysts polled by Reuters had expected.

Even so, prices barely reacted. Haitong Futures said in a note on Thursday that the failure to rise on bullish news suggests investors are cautious about chasing prices higher at current levels. Official figures from the US Energy Information Administration are due at 12 p.m. EDT (17:00 Saudi time), delayed by a day after the Columbus Day holiday on Monday.

Why Markets Are Cautious

The price action shows a market pulled in two directions. On one side are real threats: sunken ships, attacks on a major producer’s headquarters and Iranian pledges to keep pressure on shipping lanes. On the other are signs that supply is adapting, with Gulf exports recovering and Russian output edging up.

The shadow-fleet proposal adds another variable. Easing sanctions on vessels could lower freight rates and make it cheaper to move oil, but it would also mark a notable shift in how Washington applies pressure on some producers. Any final decision will be closely watched by traders, shipowners and governments.

What to Watch

Several factors will shape the days ahead. The EIA inventory report will show whether the large crude draw is confirmed. Further incidents near Hormuz could quickly lift prices again, especially if more vessels are hit. Progress on the sanctions discussion could cool freight costs. Any sign of movement toward talks between Washington and Tehran would also change the mood.

For consumers and businesses, the message is that fuel and shipping costs are likely to stay elevated while the conflict continues. For Gulf producers, the recovery in exports is welcome, but it remains well short of prewar levels, and the routes carrying that oil remain exposed.

Also Read:

Google Introduces Gemini 3.8 Flash TTS for Smarter AI-Powered Voices

AMD and World Labs: What the Acquisition Means for Businesses