Oil starts week lower after Trump's energy ceasefire remark, new Houthi strikes

World oil prices started Monday, October 12, with a decline, despite new attacks in the Middle East. The market is reacting to the resumption of supplies through the Strait of Hormuz and a statement by US President Donald Trump about a possible energy ceasefire between Ukraine and Russia.

Reported by Bloomberg.

After an initial rise, Brent crude turned lower and approached $103 a barrel. US WTI traded below $91.

Initially, prices were supported by reports of new attacks in the Middle East. On Sunday, October 11, Iran-linked Yemeni Houthi rebels again attacked the international airport in Riyadh, Saudi Arabia. There were also reports of strikes on oil tankers near the Strait of Hormuz.

However, despite the increased threats to shipping, oil exports from Gulf countries remain close to pre-war volumes. This restrains price growth, as actual supply disruptions have not yet matched the scale of geopolitical risks.

ING's head of commodity strategy Warren Patterson noted that the latest attacks were not directly aimed at energy production facilities. At the same time, strikes on tankers maintain the risk of disruption to maritime oil transportation.

Additional pressure on prices came from Trump's statement on October 11 about an alleged agreement between Ukraine and Russia on halting strikes on energy infrastructure. However, Moscow did not confirm agreement to a ceasefire, and Kyiv awaits specific terms of the American initiative.

The market also evaluates prospects for increased Russian diesel supplies. As reported by The Wall Street Journal, the Trump administration announced a deal with Moscow on exporting hundreds of thousands of tons of diesel, which could partially ease the global fuel shortage.

Commonwealth Bank of Australia analyst Vivek Dhar noted that additional Russian supplies could ease the situation in the diesel market. However, their actual impact will depend on compliance with agreements and further Ukrainian strikes on Russian refining infrastructure.

Thus, the oil market remains between two opposing factors: the resumption of actual supplies and the risk of new disruptions due to military actions in the Middle East. Despite the current decline, Brent remains above the psychological mark of $100 per barrel.

Source: Bloomberg, The Wall Street Journal