Oil prices fall after agreement to stop targeting energy facilities in Russia and Ukraine - Sarmad
Oil prices fell on Monday amid expectations of increased Russian supplies, following US President Donald Trump’s announcement that Ukraine and Russia had agreed to halt attacks on each other’s energy facilities, after a US deal with Moscow for diesel supplies.
Brent crude futures fell $1.54, or 1.47 percent, to $103.18 per barrel by 0154 GMT, while US West Texas Intermediate crude dropped $1.54, or 1.68 percent, to $90.31 per barrel.
Trump announced on Friday that Russia would immediately supply the US and global markets with more than 300,000 tons (2.25 million barrels) of diesel. He added that Russia would deliver an additional 500,000 tons in November and another million tons “shortly thereafter.” The International Energy Agency (IEA) said global daily diesel consumption is expected to reach nearly 29 million barrels.
Trump also unexpectedly announced on Sunday that Ukraine and Russia had agreed to a ceasefire in the energy sector, but Ukrainian President Volodymyr Zelensky said he was still awaiting details of the energy ceasefire, while Russia did not comment.
Tim Waterer, chief analyst at KCM Trade, said these announcements eased some immediate supply pressures.
He added, “There are still questions about the validity and sustainability of any such ceasefire, and without clearer evidence that it will actually hold, the scope of the decline is likely to remain limited.”
Fatih Birol, Executive Director of the IEA, said on Sunday that all members should assess whether it is necessary to release additional diesel supplies, and that countries that have not yet delivered their promised quantities should expedite the delivery of remaining amounts, prioritizing diesel.
However, the conflict in the Middle East continued to support Brent crude above $100 per barrel.
The Houthis claimed responsibility for a Saturday attack on Riyadh International Airport that killed 13 people and injured more than 300 others, while Saudi authorities reported injuries in a new attack on the airport on Sunday.
US President Donald Trump said on Saturday that the United States is considering joining Saudi strikes against the Houthis in this conflict, which is an extension of the broader war with Iran launched by the US and Israel in February.
Additionally, more attacks on oil tankers passing through the Strait of Hormuz were reported earlier this month, threatening to undermine the recovery in Middle East crude oil exports seen in September.
The UK Maritime Trade Operations agency reported at the start of the week that an oil tanker was attacked by a drone near Marsa in Sur, Oman, while another was damaged by an unidentified shell while transiting the Strait of Hormuz.
