Oil prices declined nearly 2% on Wednesday, erasing the previous day’s gains as investors kept a close eye on developments in the Red Sea, where shippers are returning despite further attacks on Tuesday.
Brent crude futures settled down $1.42, or 1.8%, at $79.65 a barrel.
U.S. West Texas Intermediate (WTI) crude fell $1.46, or 1.9%, to $74.11.
Danish shipping company Maersk and France’s CMA CGM both announced plans to resume passage through the Red Sea after a temporary halt due to attacks by Yemen’s Iran-backed Houthi militia.
The previous session saw both Brent and WTI benchmarks settling more than 2% higher as the Red Sea attacks raised concerns about potential shipping disruptions.
The prospect of a prolonged Israeli military campaign in Gaza also influenced market sentiment, with Israeli forces intensifying their assault on central Gaza.
Oil loadings at the Russian Black Sea port of Novorossiisk were suspended due to a storm, but the Caspian Pipeline Consortium (CPC) terminal near the port remained open.
U.S. crude oil inventories reportedly rose by 1.84 million barrels last week, according to the American Petroleum Institute (API). Official U.S. government data on stockpiles is scheduled for release on Thursday.
Russia, the world’s third-largest oil producer, is expected to maintain or increase oil output next year as Moscow has largely overcome Western sanctions.