Dubai: Crude oil prices fell on Monday, October 12, amidst choppy early trading. Traders balanced steady Gulf exports against rising regional tension and a US claim that Russia and Ukraine have agreed to an energy ceasefire.
Brent crude slipped below $103 a barrel after an early gain. West Texas Intermediate traded near $90. The retreat offers a brief breather to other commodities.
West-Asia clashes escalate
However, violence continued over the weekend. Saudi Arabia’s main airport came under attack again on Sunday. Another tanker was hit in the Strait of Hormuz. Despite all this, crude keeps moving through the waterway. JPMorgan Chase puts Persian Gulf exports at 17.5 million barrels a day, or 98 per cent of pre-war levels.
The Riyadh strike followed a Saturday attack that killed 12 people. Saudi Press Agency reports that the kingdom’s foreign minister spoke with his Iranian counterpart before the latest hit. The Houthis opened their front against Saudi Arabia in July, targeting energy sites and Red Sea tankers. Saudi-backed forces in Yemen have since launched a campaign to retake Houthi-held areas.
Yanbu on the Red Sea remains the pressure point. France plans to send soldiers, radars and defence systems to protect the terminal. For now, Riyadh has restored pipeline flows to about 3.5 million barrels a day.
Russia-Ukraine energy ceasefire?
Meanwhile, President Trump says he’s brokered a deal with Russian President Vladimir Putin to put Russian diesel on the market. Lawmakers from both US parties have criticised the plan. While Ukrainian President Volodymyr Zelenskyy has outrightly opposed it, arguing the extra revenue would help Moscow fund its war.
With this deal, Russia will supply 300,000 tonnes of diesel immediately, 500,000 tonnes in November and 1 million tonnes after that. The Treasury Department has partially waived off sanctions on Russian diesel through April 2027.
Kpler data shows Russia delivered 28.6 million tonnes last year. European diesel futures still tumbled as much as 8.3 per cent. The move comes as diesel costs have climbed worldwide, but now voters in the US are voicing their frustration weeks ahead of the midterm elections due in November.
The International Energy Agency has pushed for faster and prompt action. Executive Director Fatih Birol has urged governments to accelerate pledged diesel releases and even consider supplying more. The IEA’s governing board meets on October 15.
Brent still trades above $100.