Oil prices edged lower on Tuesday, setting up their first daily loss in almost a week. Market participants were weighing attacks on Saudi Arabia against the prospect of extra diesel arriving from Russia.
Brent crude slipped $1.18, a 1.1% fall, to $105.47 per barrel by 0625 GMT. US West Texas Intermediate was down $1.17, or 1.3%, at $92.57. Both benchmarks had climbed nearly $2 in the previous session, with Brent settling at its highest level since September 15.
Russian diesel plan and US sanctions relief
President Donald Trump said Russia had committed to supplying diesel to world markets, and his administration had temporarily eased US sanctions on Russian fuel. Those sanctions are designed to cut Moscow’s revenue from its war on Ukraine.
Analysts at ING said extra supplies could help ease tightness in global fuel markets, though they remained sceptical about the Russia-Ukraine energy ceasefire. They pointed to reports that Russia had hit Ukrainian energy targets since Trump announced the truce.
Lawmakers from both major US parties have complained that Trump’s agreement with Putin appears to breach a US law barring Russian energy imports until Moscow stops attacking Ukraine.
Gulf infrastructure attacks and Hormuz tanker incidents
Concerns about Gulf energy sites and shipping routes stayed prominent after Iran-aligned Houthis struck Riyadh’s international airport over the weekend. Tanker attacks were also reported close to the Strait of Hormuz.
The episodes risked undoing the recovery in Middle East supplies seen in September and revived fears of further disruption on one of the world’s most important energy routes. Tim Waterer, chief analyst at KCM Trade, said steadier Saudi flows and Russian diesel brought some relief, but the market still feared more hits to ships or pipelines than it was reassured by extra barrels. He added that, until de-escalation becomes clearer, “the path of least resistance still leans higher.”
OPEC lowers demand growth and flags freight costs
Ministers from OPEC and non-OPEC participants in the Declaration of Cooperation said freight and insurance charges had climbed to unprecedented levels, above one-third of the commodity’s value, slowing the movement of crude and refined products.
Haitham Al Ghais, secretary general of OPEC, said on Monday that the group had cut its forecast for oil demand growth this year to 400,000 barrels per day, down from 1.4 million bpd when the year began. He linked the revision to how events had unfolded over the period.
