Oil prices fell on Tuesday, on track for their first decline in nearly a week, as traders weighed the prospect of additional diesel supplies from Russia against supply risks from attacks on Saudi Arabia. Brent crude futures dropped $1.18, or 1.1 percent, to $105.47 a barrel by 09:25 Saudi time, while US West Texas Intermediate futures were down $1.17, or 1.3 percent, at $92.57 a barrel, Reuters reported. The site market tables, which capture the previous close, show Brent at $104.87, down 1.67 percent, and WTI at $92.08, down 1.77 percent.
The pullback follows a strong Monday session. Both benchmarks climbed nearly $2 a barrel in the previous session, with Brent settling at its highest since September 15, after weekend Houthi strikes on Riyadh’s international airport and fresh tanker attacks near the Strait of Hormuz. Bloomberg reported the Saturday strike on the airport killed 12 people and wounded 309, with a Sunday attack killing one person and injuring 11, and the Houthis claiming the attacks as a response to Saudi strikes in Yemen.
On the other side of the ledger, President Donald Trump said Russia had agreed to supply diesel to global markets, and his administration temporarily lifted US sanctions on Russian fuel. Additional supplies could help alleviate tightness in global fuel markets, tempering some of the supply concerns that have supported crude prices recently. ING analysts noted considerable scepticism over the Russia-Ukraine energy ceasefire, particularly with reports that Russia has hit Ukrainian energy targets since Trump announced it, and lawmakers from both US parties have complained the agreement appears to violate US law barring imports of Russian energy.
The Gulf risk has not gone away. Concerns over the vulnerability of Gulf energy infrastructure and shipping lanes remained in focus after the Houthi airport strikes and the tanker attacks near Hormuz, incidents that threatened to derail a recovery in Middle East supplies seen in September. KCM Trade chief analyst Tim Waterer said fresh diesel supply from Russia and steadier Saudi flows are offering some relief, but the market still looks more worried about the risk of further hits to ships or pipelines in the Gulf than it is reassured by extra barrels.