Oil prices eased on Thursday after Iranian state media reported that dozens of vessels had crossed the Strait of Hormuz in recent hours, easing fears of a prolonged supply disruption in the Gulf.
Brent crude futures fell 0.6% to $105.03 a barrel by 1422 GMT, retreating from an earlier session high of $107.13, while U.S. West Texas Intermediate crude dropped 0.5% to $100.50 a barrel.
The decline followed reports by Iran’s semi-official Fars news agency that Tehran had begun allowing passage for some Chinese vessels through the strategic waterway, which has remained largely restricted since the Iran war erupted in late February.
The White House said U.S. President Donald Trump and Chinese President Xi Jinping agreed during talks that the Strait of Hormuz must remain open to ensure the free flow of global energy supplies.
Xi also reportedly expressed interest in increasing purchases of U.S. crude oil as China seeks to reduce reliance on Middle Eastern shipping routes amid ongoing regional instability.
Shipping activity through the strait showed signs of improvement, with a Chinese supertanker carrying Iraqi crude successfully passing through after being stranded in the Gulf for more than two months.
Ship-tracking data also showed a Panama-flagged tanker managed by Japanese refiner Eneos Holdings navigating the strait, marking another rare transit linked to Japan since the conflict began.
Despite the easing tensions, concerns over global supply remain elevated after the International Energy Agency warned this week that oil inventories are being depleted at an unprecedented pace.
In the United States, government data showed crude inventories fell by 4.3 million barrels in the week ended May 8 due to stronger exports, although distillate stockpiles unexpectedly increased.
Oil markets also remained under pressure from fears that rising fuel prices could fuel inflation and prompt further U.S. interest rate hikes, weighing on broader investor sentiment.