SINGAPORE: Global oil prices fell on Monday amid expectations of increased Russian fuel supplies after US President Donald Trump said Russia and Ukraine had agreed to halt attacks on each other’s energy infrastructure.
Brent crude futures declined $1.54, or 1.47 per cent, to $103.18 a barrel by 0154 GMT, while US West Texas Intermediate (WTI) crude fell by the same amount to $90.31 a barrel, down 1.68 per cent.
ICE gasoil futures, a benchmark for diesel, dropped 3 per cent to $1,436 per barrel after Trump announced that Russia would immediately supply more than 300,000 metric tonnes of diesel to the United States and global markets. He added that another 500,000 tonnes would be supplied in November, followed by a further one million tonnes.
Global diesel consumption is forecast to approach 29 million barrels per day, according to the International Energy Agency (IEA).
Trump also announced on Sunday that Moscow and Kyiv had agreed to an energy ceasefire. However, Ukrainian President Volodymyr Zelenskiy said he was awaiting further details, while Russia had not commented on the announcement.
The developments eased some immediate supply concerns, according to KCM Trade chief analyst Tim Waterer. However, he cautioned that uncertainty over the ceasefire’s validity and duration could limit further declines in oil prices.
IEA Executive Director Fatih Birol called on member countries to assess whether additional diesel releases were necessary and urged those yet to fulfil their pledged supplies to accelerate deliveries, prioritising diesel.
Despite the easing supply concerns, Brent crude remained above $100 a barrel as the wider Middle East conflict continued to threaten global energy supplies.
Attacks linked to the regional conflict raised fresh concerns about security in Saudi Arabia and shipping routes. The United Kingdom Maritime Trade Operations also reported incidents involving tankers near Oman’s Sohar anchorage and in the Strait of Hormuz, a critical route for global oil shipments.
Further disruptions in the strait could undermine the recovery in Middle Eastern crude exports recorded in September and sustain upward pressure on international oil prices.
Meanwhile, Goldman Sachs raised its December Brent crude price forecast to $90 a barrel from $85 previously. The bank maintained that adjustments in Middle Eastern supply could eventually lower prices, although renewed escalation remained a significant upside risk.
The analysts estimated that geopolitical tensions were adding just over $20 a barrel to oil prices. They forecast WTI crude to average $81 a barrel in December 2026 and $73 in 2027.
Separately, energy companies Shell, Chevron and BP were working to redeploy personnel and restore production at their Gulf of Mexico platforms after Hurricane Isaias made landfall on Saturday.
Market movements will continue to depend on developments in the Russia-Ukraine conflict, the security of Middle Eastern shipping routes, and the pace at which disrupted energy supplies return to global markets.
Story by Reuters
