According to the data, Brent crude oil futures dropped by 0.8%, reaching $79.05 per barrel by 01:20 GMT, while the American West Texas Intermediate fell by 0.7%, trading at $73.67 per barrel.
The previous day saw oil prices rise due to concerns about potential trade issues as major maritime carriers opted to steer clear of routes through the Red Sea, resulting in increased transportation and insurance costs.
However, activity in the oil and gas industry remained almost unchanged in the fourth quarter, as per a survey by the Federal Reserve Bank of Dallas. This led to diminished optimism amid escalating uncertainty.
Economist Kunal Patel from the Bank highlighted that declining average oil prices and questions regarding OPEC's ability to influence these prices became key factors contributing to the uncertainty.
According to senior economist at the NLI research institute, Tsuyoshi Ueno, the significance of the Red Sea to the market remains limited until oil flows into the Strait of Hormuz.
The US Energy Information Administration (EIA) reported a 2.9 million barrel increase in US crude inventories for the week ending December 15, surpassing analysts' expectations. Concurrently, US oil production set a new record at 13.3 million barrels per day.
It's important to note that approximately 12% of global traffic passes through the Red Sea and the Suez Canal. Nonetheless, its impact on oil supplies is limited for now, as the majority of Middle Eastern oil exports transit through the Strait of Hormuz.
"At this stage, given the absence of additional production cuts from OPEC+ this year, it is likely that oil prices will remain near current levels until the end of the year. Attention will focus on key economic statistics and the US dollar's reaction to them," noted Naohiro Niimura, a partner at Market Risk Advisory, a research and consulting firm.
He predicts WTI prices will fluctuate between $70 and $75 this month.
The coalition led by the US, setting price limits on Russian oil transported by sea, announced changes in compliance with requirements on Wednesday. The Finance Ministry believes these changes will make it difficult for Russian exporters to bypass the set limitations.
According to the latest Energy Information Administration figures released on Wednesday, total US oil production hit a record level of 13.3 million barrels per day.