Oil prices declined on Monday following expectations of increased Russian oil and fuel supplies after US President Donald Trump announced that Russia and Ukraine had agreed to halt attacks on each other’s energy facilities.
Brent crude futures fell by $1.54, or 1.47 per cent, to $103.18 per barrel, while US West Texas Intermediate (WTI) crude dropped by $1.54, or 1.68 per cent, to $90.31 per barrel as of 0154 GMT on October 12, 2026.
The decline followed Trump's announcement that Russia would supply more than 300,000 metric tonnes of diesel, equivalent to approximately 2.25 million barrels, to the United States and global markets.
Trump also said Russia would provide an additional 500,000 tonnes in November and another one million tonnes afterwards.
The announcement came amid concerns over global fuel supplies and rising energy prices linked to ongoing conflicts.
Trump also announced on Sunday that Russia and Ukraine had agreed to an energy ceasefire. However, Ukrainian President Volodymyr Zelenskiy said he was still awaiting further details, while Moscow had yet to comment on the agreement.
Tim Waterer, chief analyst at KCM Trade, said the announcements had eased some immediate concerns about energy supplies.
However, he warned that uncertainty remained over whether the ceasefire would hold and how long it would last.
The International Energy Agency's Executive Director, Fatih Birol, urged member countries to assess whether additional diesel releases were necessary and called on nations that had not fulfilled their commitments to accelerate deliveries, prioritising diesel supplies.
Middle East Conflict Continues to Support Oil Prices
Despite the decline, oil prices remained elevated as the ongoing conflict in the Middle East continued to threaten global energy supplies.
The Iran-related conflict has increased concerns over the security of oil shipments, particularly through the Strait of Hormuz, a critical route for global energy trade.
Yemen's Houthi movement claimed responsibility for a Saturday attack on Riyadh's international airport that reportedly killed 13 people and injured more than 300. Saudi authorities also reported injuries following another attack on the airport on Sunday.
Trump said on Saturday that the United States was considering joining Saudi Arabia in military strikes against the Houthis.
The attacks represent a further escalation of the wider regional conflict that began with US and Israeli strikes against Iran in February 2026.
Meanwhile, fresh attacks on commercial vessels passing through the Strait of Hormuz have raised concerns about the recovery of Middle Eastern oil exports.
The United Kingdom Maritime Trade Operations reported that a tanker was struck by a drone near the Sohar anchorage in Oman, while another vessel was damaged by an unidentified projectile while transiting the Strait of Hormuz over the weekend.
The incidents threaten to disrupt oil shipments and could keep crude prices elevated despite expectations of increased supplies from Russia.
Goldman Sachs Revises Oil Price Forecast
Goldman Sachs raised its forecast for Brent crude prices in December 2026 to $90 per barrel, up from its previous estimate of $85.
Analysts led by Daan Struyven said they expected continued adjustments to Middle Eastern oil supplies to eventually help bring prices down.
However, they warned that renewed escalation in the region could push prices higher, estimating the current geopolitical risk premium at slightly more than $20 per barrel.
The bank also forecast that US WTI crude would average $81 per barrel in December 2026 and $73 in 2027.
According to the analysts, unusually high shipping costs between the United States and Europe have contributed to the difference between Brent and WTI prices.
Gulf of Mexico Production Recovery
Separately, major energy companies, including Shell, Chevron and BP, were working to redeploy personnel and restore production at their platforms in the Gulf of Mexico following Hurricane Isaias.
The hurricane made landfall in Florida early on Saturday, disrupting operations and prompting energy companies to assess the impact on their facilities.
Market participants will continue monitoring developments in Russia and Ukraine, security threats in the Middle East and the recovery of oil production in the Gulf of Mexico for their potential effects on global energy prices.
Source: Reuters
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