Oil Prices Fall as Trump Announces Russia-Ukraine Energy Ceasefire

Oil prices fell on Monday as markets assessed the prospect of increased Russian diesel supplies and a reported agreement between Russia and Ukraine to halt attacks on each other’s energy infrastructure. However, continued conflict in the Middle East kept Brent crude above $100 a barrel.

Brent crude futures dropped $1.54, or 1.47 per cent, to $103.18 a barrel by 4:54 a.m. Saudi time. US West Texas Intermediate crude fell by the same amount, or 1.68 per cent, to $90.31 a barrel.

ICE gasoil futures, a benchmark for diesel, declined 3 per cent to $1,436 per metric tonne after US President Donald Trump announced plans for Russia to supply additional diesel to American and global markets.

Trump said on Friday that Russia would immediately provide more than 300,000 metric tonnes of diesel, equivalent to around 2.25 million barrels. He added that another 500,000 tonnes would arrive in November, followed by a further one million tonnes immediately afterwards.

Global diesel consumption is forecast to approach 29 million barrels a day, according to the International Energy Agency (IEA).

Trump also announced on Sunday that Russia and Ukraine had agreed to an energy ceasefire. Ukrainian President Volodymyr Zelenskiy said he was waiting for details of the arrangement, while Moscow had not commented.

The announcements eased some immediate concerns about fuel supplies, according to Tim Waterer, chief analyst at KCM Trade. However, he warned that uncertainty over the ceasefire’s validity and duration could limit the decline in prices until there was clearer evidence that the agreement would hold.

IEA Executive Director Fatih Birol said on Sunday that member countries should assess whether further diesel releases were necessary. He also urged countries that had not fully delivered previously pledged supplies to accelerate the remaining releases, prioritising diesel.

Middle East tensions support crude prices

Despite the prospect of additional Russian supplies, the conflict in the Middle East continued to underpin oil prices.

Yemen’s Houthi movement claimed responsibility for a Saturday attack on Riyadh’s international airport that killed 13 people and injured more than 300, while Saudi authorities reported injuries in another attack on Sunday. Trump said the United States was considering joining Saudi strikes against the Houthis.

The attacks form part of a wider regional conflict linked to the war involving Iran, which began in February with US and Israeli strikes.

Security concerns have also intensified around the Strait of Hormuz, a critical route for global oil shipments. The UK Maritime Trade Operations agency reported that a tanker was struck by a drone near Oman’s Sohar anchorage, while another vessel was damaged by an unidentified projectile while transiting the strait.

The incidents threaten to disrupt the recovery in Middle Eastern crude exports recorded in September.

Goldman Sachs raised its December Brent forecast to $90 a barrel from $85, citing continuing uncertainty over regional supplies. Its analysts estimated that geopolitical risks were adding slightly more than $20 a barrel to prices.

The bank forecast US WTI crude to average $81 a barrel in December 2026 and $73 in 2027, citing unusually high shipping costs between the United States and Europe.

Meanwhile, Shell, Chevron and BP were working to redeploy personnel and restore production at their Gulf of Mexico platforms after Hurricane Isaias made landfall in Florida early on Saturday.