Oil prices declined on Monday as traders assessed prospects for increased Russian diesel supplies and a possible Russia-Ukraine energy ceasefire. The announcements raised hopes of easing supply pressures, although continued tensions across the Middle East limited expectations for further declines.
Brent crude futures dropped $1.54, or 1.47 percent, to $103.18 per barrel by 04:54 a.m. Saudi time. Meanwhile, US West Texas Intermediate crude fell by the same amount, losing 1.68 percent to reach $90.31 per barrel. Additionally, ICE gasoil futures, which track diesel prices, declined three percent to $1,436 per metric ton.
US President Donald Trump announced on Friday that Russia would immediately supply more than 300,000 metric tonnes of diesel. The shipment represents approximately 2.25 million barrels intended for American and international markets. Furthermore, Russia plans to provide another 500,000 tonnes in November, followed by an additional one million tonnes afterward.
These proposed deliveries could offer temporary relief to markets facing concerns about fuel availability. However, global diesel consumption remains substantial, with the International Energy Agency forecasting daily demand near 29 million barrels. Consequently, additional supplies may ease immediate pressures without necessarily resolving broader energy market uncertainties.
Trump also announced on Sunday that Russia and Ukraine had agreed to stop attacking each other’s energy facilities. However, Ukrainian President Volodymyr Zelenskiy said he was still awaiting further details about the proposed arrangement. Russia had not publicly commented on the announcement at the time of reporting.
Market analyst Tim Waterer said the announcements had reduced some immediate concerns about energy supplies. Nevertheless, he warned that uncertainty surrounding the ceasefire’s credibility and duration could restrict further market declines. Traders therefore continue to assess whether the reported agreement will produce lasting changes in supply conditions.
International Energy Agency Executive Director Fatih Birol also urged members to evaluate whether additional diesel releases were necessary. He called on countries with outstanding commitments to accelerate deliveries, prioritising diesel supplies where possible.
Despite these developments, oil prices continued to reflect significant risks across the Middle East. Brent crude remained above $100 per barrel as regional hostilities threatened production, transportation routes, and the movement of energy shipments.
Yemen’s Houthi movement claimed responsibility for a Saturday attack on Riyadh’s international airport. Reports said the incident killed 13 people and injured more than 300, while Saudi authorities also reported injuries following another attack on Sunday. Trump said on Saturday that Washington was considering joining Saudi strikes against the Houthis.
The wider conflict, which followed the US-Israeli war against Iran launched in February, has heightened regional security concerns. Meanwhile, attacks on vessels passing through the Strait of Hormuz have increased during October. These incidents threaten shipping operations and could undermine the recovery in Middle Eastern crude exports recorded during September.
The United Kingdom Maritime Trade Operations reported that a drone struck a tanker near Oman’s Sohar anchorage. Another vessel sustained damage from an unidentified projectile while travelling through the Strait of Hormuz. Such incidents raise concerns about shipping costs and the reliability of crucial energy transportation routes.
Goldman Sachs increased its December Brent crude forecast to $90 per barrel, up from its previous estimate of $85. Analysts led by Daan Struyven said continued adjustments to Middle Eastern supplies could eventually reduce prices. However, they warned that renewed escalation could create significant upward pressure, estimating the existing risk premium at slightly above $20 per barrel.
The bank also forecast West Texas Intermediate crude averaging $81 per barrel in December 2026 and $73 in 2027. Analysts attributed the unusually wide gap between US and Brent prices partly to elevated shipping costs between the United States and Europe.
Meanwhile, energy companies Shell, Chevron, and BP worked to redeploy personnel and restore offshore production following Hurricane Isaias. The storm made landfall near Florida early Saturday, creating another operational challenge for producers in the Gulf of Mexico. Overall, oil prices will depend on whether additional supplies materialise, regional tensions ease, and energy infrastructure returns to normal operations.
