Oil prices plunge after Trump announces Ukraine-Russia energy ceasefire
Photo: Oil prices have fallen (Getty Images)
Global oil prices fell on Monday, October 12, amid expectations of increased Russian oil supplies following US President Donald Trump's announcement of an energy truce between Ukraine and Russia, according to Bloomberg.
At the same time, the escalation of the conflict in the Middle East and attacks on oil infrastructure and tankers continue to pose risks to the global energy market.
Brent crude futures fell by about 1.3% to $103.35 per barrel. US West Texas Intermediate (WTI) crude fell by 1.4% to $90.55 per barrel.
The market was influenced by US President Donald Trump's statement regarding an agreement between Ukraine and Russia to cease attacks on energy infrastructure. According to the US leader, this was achieved following agreements on the supply of Russian diesel fuel, the agency writes.
The potential increase in fuel supplies from Russia has eased fears of a market shortage, Bloomberg notes.
At the same time, analysts caution that without confirmation of the agreements and an understanding of how long they will remain in effect, the impact of this factor on prices may be limited.
Middle East attacks propping up oil prices
Despite the decline in prices, the oil market remains under pressure due to the escalating situation in the Middle East.
Yemeni Houthis claimed responsibility for Saturday's attack on Riyadh International Airport in Saudi Arabia, which reportedly killed several people and injured hundreds.
Saudi authorities also reported a new attack on the airport on Sunday.
In addition, there have been reports in recent weeks of attacks on tankers near the Strait of Hormuz. Specifically, one tanker was attacked by a drone near the Sohar anchorage in Oman, and another vessel was damaged by an unknown projectile while passing through the strait.
These incidents are heightening concerns about disruptions to oil supplies from the Middle East. The Strait of Hormuz is one of the key routes for global energy trade, so an escalation of the security situation in this region could trigger new price fluctuations.
Donald Trump stated that the US is considering joining Saudi Arabia’s strikes against the Houthis.
On October 11, Trump announced an energy ceasefire between Ukraine and Russia. However, on the same day, Russia struck the Kharkiv Thermal Power Plant.
In addition, Trump reached an agreement with Russia for it to supply a significant amount of diesel fuel to the global market: over 300,000 metric tons immediately, another 500,000 metric tons in November, and one million metric tons later.
