Oil slips to $105 amid Middle East conflict, supply concerns

October 16, 2026 (MLN): Oil prices declined in early Friday trading as investors assessed escalating Middle East tensions and potential U.S. plans to ease restrictions on certain oil tankers.

Currently, Brent crude futures is down, 0.64%, at $105.24 per barrel, according to data by Mettis Global.

West Texas Intermediate (WTI) crude futures is down by $2.22, or 2.27%, to $95.75 per barrel by [11:05 am] PST.

Prices had advanced overnight during the previous session, with West Texas Intermediate (WTI) crude settling more than 3% higher on Thursday following a substantial drawdown in U.S. crude inventories. Brent crude, meanwhile, ended the session little changed.

The International Energy Agency (IEA) agreed on Thursday to release more than 20 million barrels of diesel, along with any remaining oil from the record emergency reserve release pledged in March, to increase supply and ease surging prices.

However, the measures have yet to fully calm the market. Haitong Futures said in a Friday note that the overnight gains indicated investors remained dissatisfied with the announced steps, adding that a reduction in Middle East tensions would be more effective in easing pressure on oil prices, according to CNBC.

Separately, the Trump administration is considering lifting sanctions on certain vessels belonging to the so-called shadow fleet, which transports oil and petroleum products from countries including Russia, Iran and Venezuela. A U.S. official disclosed the discussions on Wednesday, saying the move aims to ease record-high global freight rates.

The deliberations follow President Donald Trump's temporary suspension of sanctions on Russian diesel fuel, a decision that drew criticism from Ukrainian President Volodymyr Zelenskiy, European countries and several Republican lawmakers in the U.S. Senate.

Meanwhile, intensifying hostilities involving Saudi Arabia and Yemen's Houthi movement, alongside renewed attacks on regional shipping, continued to underpin oil prices.

Maritime attacks in the region have increased over the past 10 days, while Iran has threatened intensified strikes in response to the U.S. blockade of its ports and tighter sanctions imposed last month.

The Houthis fired missiles at the presidential palace complex in Aden on Thursday, killing two guards. Separately, the Saudi-led coalition in Yemen reported dozens of attacks targeting Saudi infrastructure, highlighting the growing risks to regional security and energy supply routes.

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