Oil prices slipped on Monday as markets weighed the possibility of more Russian diesel supplies. US President Donald Trump said Russia would supply additional diesel to the US and global markets. He also announced that Russia and Ukraine had agreed to stop attacks on each other’s energy facilities. These developments raised hopes that fuel supplies could improve and ease some pressure on prices.
Brent crude prices stood at $104.50 per barrel on Monday. Brent crude futures fell 22 cents, or 0.2%, to $104.50 per barrel by 0821 GMT. Meanwhile, US West Texas Intermediate (WTI) crude fell 40 cents, or 0.4%, to $91.45 per barrel. Both benchmarks had fallen by more than 1% earlier in the session.
Trump’s diesel deal and oil prices
Trump’s diesel deal could bring 2.25 million barrels of additional supplies to the market. On Friday, Trump said Russia would immediately supply more than 300,000 metric tons of diesel, equivalent to around 2.25 million barrels, to the US and global markets. He added that more supplies would follow later, according to Reuters.
Diesel prices fell sharply after Trump’s announcement. ICE gasoil futures, a key European diesel price benchmark, dropped 4.6% to $1,415 per metric ton. The fall reflected expectations of additional diesel supplies reaching the market.
Russia’s diesel supply faces limits
However, analysts questioned whether the deal could quickly increase available supplies. PVM analyst Tamas Varga said the immediate impact of the deal was uncertain because Russia’s refining capacity had been severely reduced. This could limit how much additional diesel the country can produce and deliver in the short term, as quoted by Reuters.
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Russia has also partially relaxed its diesel export restrictions. Moscow has allowed 500,000 metric tons of diesel, equivalent to around 3.7 million barrels, to enter the international market. Varga said this volume was roughly equal to one day of US diesel consumption and around 13% of global demand.
Russia-Ukraine energy ceasefire
Trump’s energy ceasefire announcement has raised hopes of fewer attacks on energy infrastructure. On Sunday, Trump unexpectedly announced that Russia and Ukraine had agreed to stop attacking each other’s energy facilities. However, Ukrainian President Volodymyr Zelenskiy said he was still waiting for details of the agreement, while Russia had not commented on the announcement, according to Reuters.
The International Energy Agency has called for countries to review their diesel supplies. IEA chief Fatih Birol said all member countries should assess whether additional diesel releases were needed. He also urged countries that had not fully delivered their previously pledged supplies to speed up the remaining releases, with priority given to diesel.
Iran war risks keep oil prices high
Despite the Russian supply deal, the Middle East conflict continues to keep Brent crude above $100 per barrel. Concerns about attacks on energy infrastructure and disruptions to oil shipments have supported prices. This means additional diesel supplies may ease some pressure on fuel markets without necessarily bringing down crude oil prices significantly.
An attack claimed by Iran-aligned Houthis has added to regional security concerns. The Houthis claimed responsibility for a Saturday strike on Riyadh’s international airport that killed 13 people and wounded more than 300. The incident added to concerns about the wider security situation in the Middle East.
Strait of Hormuz oil supply risks
Attacks on tankers near the Strait of Hormuz are threatening the recovery in oil exports. More attacks on tankers travelling through the strategic waterway have been reported this month. These incidents could slow the recovery in Middle Eastern crude exports that was seen in September.
Two reported maritime incidents have added to concerns over oil shipments. A tanker was struck by a drone near Sohar in Oman, while another vessel was damaged while travelling through the Strait of Hormuz. The United Kingdom Maritime Trade Operations reported the incidents, according to Reuters.
Brent crude price forecast for 2026
Goldman Sachs has raised its forecast for Brent crude prices in December. The investment bank increased its December Brent forecast to $90 per barrel from $85 per barrel. It also estimated that the risk premium in oil prices was slightly above $20 per barrel. A risk premium is the extra amount traders pay because of concerns about possible supply disruptions.
Goldman Sachs expects US crude prices to remain lower than Brent in the coming years. The bank forecast that WTI crude would average $81 per barrel in December 2026 and $73 per barrel in 2027. It attributed the unusually wide gap between WTI and Brent prices partly to high shipping costs for transporting US oil to Europe, as quoted by Reuters.
Hurricane Isaias threatens oil production
Hurricane Isaias has created another challenge for oil production in the Gulf of Mexico. Energy companies Shell, Chevron and BP were seeking to redeploy personnel and restore production at their offshore platforms after the hurricane made landfall early on Saturday. Any delays in restoring output could affect regional oil supplies.
The key question is whether Russian diesel supplies can offset the risks from the Iran war and wider Middle East tensions. The additional diesel could help ease pressure on fuel supplies, particularly if more Russian exports reach international markets. However, the deal does not directly remove the risks to crude oil shipments from tanker attacks or disruptions around the Strait of Hormuz. With Brent still at $104.50 per barrel, Middle East tensions remain an important factor supporting oil prices.