International
oi-Prakash KL
Oil prices slipped on Monday as expectations of increased Russian diesel supplies and a possible pause in attacks on energy infrastructure in the Russia-Ukraine conflict eased some concerns over global fuel supplies. However, continued tensions in the Middle East kept Brent crude above the $100-a-barrel mark.
Brent crude futures fell $1.54, or 1.47%, to $103.18 a barrel by 7.24 am IST. US West Texas Intermediate (WTI) crude also declined by $1.54, or 1.68%, to $90.31 a barrel.
Oil prices declined Monday as increased Russian diesel supply news and a potential Russia-Ukraine energy ceasefire eased concerns, though Middle East tensions kept Brent crude above $100 a barrel amid Houthi attacks.
Diesel prices came under further pressure after US President Donald Trump said Russia would increase supplies to the US and other global markets. ICE gasoil futures, a key benchmark for diesel, dropped 3% to $1,436 a barrel.
Trump said on Friday that Russia would immediately provide more than 300,000 metric tonnes of diesel, equivalent to about 2.25 million barrels. He said a further 500,000 tonnes would be supplied in November, followed by another 1 million tonnes “immediately thereafter”.
The additional volumes could offer some relief to a market facing tight supply conditions. The International Energy Agency estimates that global diesel consumption is close to 29 million barrels a day.
The impact, for India, could extend beyond a short-term decline in global crude prices. Additional Russian fuel supplies could help ease pressure on international markets and reduce price volatility ahead of winter, when diesel demand tends to rise in several major economies.
However, the extent of any benefit for India will depend on the volume of fuel reaching international markets, freight and insurance costs, and disruptions to other sources of crude and refined products.
Supply concerns were also eased after Trump said on Sunday that Russia and Ukraine had agreed to stop attacks on each other’s energy facilities. Ukrainian President Volodymyr Zelenskyy, however, said he was still awaiting details of the proposed energy ceasefire.
The announcements provided some immediate relief to the oil market, according to KCM Trade chief analyst Tim Waterer. However, questions remain over whether such a ceasefire can hold for long.
“Questions remain over the validity and longevity of any such ceasefire,” Waterer said, according to Reuters, adding that the pullback in oil prices could remain limited without clearer evidence that the agreement will hold.
Middle East tensions keep oil prices elevated
The Middle East remains the biggest source of uncertainty for crude markets. The Houthis claimed responsibility for a Saturday attack on Riyadh’s international airport, which reportedly killed 13 people and injured more than 300. Saudi authorities also reported injuries in another attack on the airport on Sunday.
Trump said on Saturday that the US was considering joining Saudi Arabia in strikes against the Houthis. The latest escalation comes amid the wider conflict involving Iran, the US and Israel.
