Oil falls on hopes Russia-Ukraine energy ceasefire will boost supplies
Oil prices slipped on Monday on expectations of more Russian supplies after US President Donald Trump said Ukraine and Russia had agreed to halt attacks on each other’s energy facilities following a US diesel-supply deal with Moscow.
Brent crude futures fell $1.54, or 1.47%, to $103.18 a barrel by 0154 GMT while US West Texas Intermediate crude was at $90.31 a barrel, down $1.54, or 1.68%.
ICE gasoil futures fell 3% to $1,436 per barrel after President Trump said on Friday that Russia will immediately supply more than 300,000 metric tons of diesel to US and global markets.
Russia would supply another 500,000 tons in November and a further 1 million tons “immediately thereafter”, Trump added.
The daily diesel consumption globally is forecast at close to 29 million barrels, according to the International Energy Agency.
Trump also unexpectedly announced on Sunday that Ukraine and Russia had agreed to an energy ceasefire, but Ukrainian leader Volodymyr Zelenskiy said he was still waiting to see details of the energy ceasefire while Russia did not comment.
The announcements eased some of the immediate supply pressure, Tim Waterer, KCM Trade chief analyst, said.
“Questions remain over the validity and longevity of any such ceasefire, and without clearer evidence that it will actually hold, the extent of the pullback is likely to stay limited,” he added.
IEA’s Executive Director Fatih Birol said on Sunday that all members should assess whether additional diesel releases are necessary and that countries which have not yet fully delivered pledged volumes accelerate their remaining releases prioritising diesel.
Crude supported by Middle East conflict
However, the Middle East conflict continued to support Brent crude at above $100 a barrel.
The Houthis claimed responsibility for a Saturday strike on Riyadh’s international airport that killed 13 people and wounded more than 300.
At the same time, Saudi authorities reported that people were injured in a new attack on the airport on Sunday.
US President Donald Trump said on Saturday the United States was considering joining Saudi strikes on the Houthis in the conflict, a spillover from the wider war with Iran that the US and Israel launched in February.
In addition, more attacks on tankers sailing through the Strait of Hormuz have been reported so far this month, threatening to dampen a recovery in Middle East crude exports seen in September.
A tanker was struck by a drone in the vicinity of Sohar anchorage, Oman, while another was damaged by an unknown projectile while transiting the Strait of Hormuz, the United Kingdom Maritime Trade Operations reported over the weekend.
Goldman Sachs raised its Brent crude price forecast for December to $90 a barrel, up from $85 previously, its analysts led by Daan Struyven said in a note.
“We maintain our base case that continued adaptation of Mideast supply will eventually reduce crude oil prices, while potential renewed escalation still poses significant net upside risk,” the analysts said, estimating a risk premium of just over $20 a barrel.
“We forecast WTI prices, which are unusually low vs Brent because of high US-Europe shipping costs, to average $81 in December 2026 and $73 in 2027,” they added.
In the Gulf of Mexico, energy majors Shell, Chevron, and BP were seeking to redeploy personnel and restore production at their platforms after Hurricane Isaias made landfall early on Saturday.