Oil declines after five-month high, but diesel shortage remains a problem

World oil prices declined on Monday, October 19, after reaching a five-month high at the end of last week. Investors are assessing signs of a recovery in crude supplies from the Persian Gulf, despite new attacks on oil infrastructure and commercial vessels in the Middle East. Bloomberg reports.

In morning trading, benchmark Brent crude was trading near $108 a barrel after rising almost 4% on Friday. U.S. West Texas Intermediate (WTI) also fell, approaching the $100 a barrel mark.

At the end of last week, prices had risen to their highest levels in five months on fears of further disruptions to oil supplies from the Middle East.

The main factor behind the current decline in quotations was reports of a resumption of oil exports from the Persian Gulf.

U.S. Energy Secretary Chris Wright said in an interview with Fox News that oil supply volumes from the region had recovered to about 80% of the level seen before the start of the war.

However, he emphasized that the situation with refined product exports remains significantly more difficult. This especially applies to diesel fuel, whose shortage continues to put pressure on global prices.

According to Wright, Washington is negotiating with European allies on the possible release of additional diesel reserves to stabilize the market. A final decision on new supplies from reserves has not yet been announced.

The recovery in oil exports comes amid new threats to the region's transport and energy infrastructure.

In particular, Iran-backed Yemeni Houthis attacked Yanbu, one of Saudi Arabia's key oil export hubs on the Red Sea coast.

In addition, the UK Maritime Trade Operations (UKMTO) received reports of two tankers being hit in the Persian Gulf. Such incidents sustain fears about shipping safety and the continuing stability of supplies.

An additional factor behind the decline in oil prices was U.S. President Donald Trump's decision to temporarily suspend the application of some new sanctions against Russia.

As The Wall Street Journal reports, market participants are assessing the possibility of an increase in Russian energy supplies after the easing of U.S. restrictions. However, this does not yet mean actual growth in exports.

Despite the cheaper oil, the situation on the global diesel fuel market remains tense.

In its October report, the International Energy Agency noted that exports of oil products from the Middle East are recovering much more slowly than crude supplies.

According to the agency, in September, volumes of oil product exports from the region amounted to about 1.9 million barrels per day versus 4.7 million barrels before the start of the war. Thus, supplies remained at less than half of the pre-war level.

The IEA also reported that global diesel fuel exports in September were about 700 thousand barrels per day lower than a year earlier. The reduction in supplies from Russia and the Middle East was only partially offset.

Overall, since the beginning of 2026, Brent crude has risen by more than 75%. The reasons were the escalation of the conflict in the Middle East, disruption of international supply routes, and the consequences of Russia's war against Ukraine for the energy market.

At the same time, diesel fuel has been rising faster than crude oil, increasing inflationary pressure and raising costs for transport, logistics, and production.

Further dynamics of oil quotations will largely depend on the stability of supplies from the Persian Gulf and the ability to restore exports of oil products. New attacks on tankers or energy facilities could again heighten market participants' concerns.

From materials: Bloomberg, The Wall Street Journal, International Energy Agency