Oil prices fell on Monday amid expectations of increased 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 deal with Moscow to supply diesel.
Brent crude futures fell $1.54, or 1.47%, to $103.18 a barrel by 01:54 GMT. US West Texas Intermediate crude stood at $90.31 a barrel, down $1.54, or 1.68%.
Trump said on Friday that Russia would immediately supply US and global markets with more than 300,000 metric tons, or 2.25 million barrels, of diesel.
Trump added that Russia would supply another 500,000 tons in November and an additional 1 million tons “immediately thereafter.” The International Energy Agency estimates that global daily diesel consumption is close to 29 million barrels.
Trump also unexpectedly announced on Sunday that Ukraine and Russia had agreed to an energy ceasefire. Ukrainian President Volodymyr Zelenskyy, however, said he was still waiting to see the details of the agreement, while Russia did not comment.
Tim Waterer, chief market analyst at KCM Trade, said the announcements had eased some immediate supply pressures.
“There are still questions over the validity and durability of any such ceasefire, and without clearer evidence that it will actually hold, the downside is likely to remain limited,” he said.
International Energy Agency Executive Director Fatih Birol said on Sunday that all members should assess whether additional diesel releases were necessary. Countries that had not yet fully delivered their pledged volumes should accelerate the remaining deliveries, with diesel given priority, he added.
However, the conflict in the Middle East continued to support Brent crude above $100 a barrel.
The Houthis claimed responsibility for Saturday’s attack on Riyadh International Airport, which killed 13 people and injured more than 300, while Saudi authorities reported casualties in another attack on the airport on Sunday.
Trump said Saturday that the United States was considering joining Saudi strikes against the Houthis in the conflict, which is seen as an extension of the broader war with Iran launched by the United States and Israel in February.
In addition, further attacks on oil tankers transiting the Strait of Hormuz were reported this month, threatening to undermine the recovery in Middle Eastern crude oil exports recorded in September.
The United Kingdom Maritime Trade Operations agency said at the beginning of the week that an oil tanker was attacked by a drone near a port in Sohar, Oman, while another tanker was damaged by an unidentified projectile while transiting the Strait of Hormuz.
Source: Reuters
