Oil prices fluctuated on Monday as investors weighed the possibility of increased Russian diesel supplies against mounting concerns over disruptions to energy shipments following attacks on Saudi Arabia and commercial vessels in the Middle East.
Brent crude futures recovered from earlier losses, rising 69 cents, or 0.7%, to $105.41 a barrel by 2:23pm Pakistan time. US West Texas Intermediate (WTI) crude gained 57 cents, or 0.6%, to $92.42 a barrel.
The contrasting developments left energy markets balancing the prospect of additional fuel supplies against persistent geopolitical risks that could restrict crude oil exports and keep prices elevated.
Attacks on Saudi Arabia Raise Supply Concerns
The Iran-aligned Houthi movement claimed responsibility for a Saturday strike on Riyadh’s international airport that reportedly killed 13 people and injured more than 300. Further attacks were reported on Sunday.
Meanwhile, attacks on commercial tankers passing through the Strait of Hormuz have raised fresh concerns about the security of a critical route for global oil and gas shipments.
The United Kingdom Maritime Trade Operations (UKMTO) reported that a tanker had been struck by a drone near Oman’s Sohar, while another vessel was damaged while transiting the Strait of Hormuz.
The incidents threaten to undermine the recovery in Middle Eastern crude exports observed in September and could prolong supply uncertainty in international energy markets.
The Strait of Hormuz is a strategically important shipping corridor through which substantial volumes of the world’s oil and liquefied natural gas pass. Any prolonged disruption could increase transportation costs, tighten supplies and put further upward pressure on energy prices.
Goldman Sachs Raises Brent Price Forecast
Goldman Sachs raised its December Brent crude price forecast to $90 a barrel from $85, citing an estimated geopolitical risk premium of slightly more than $20 a barrel.
The investment bank also projected that WTI crude would average $81 a barrel in December 2026 and $73 in 2027.
Analysts attributed the unusually large gap between WTI and Brent prices partly to elevated shipping costs between the United States and Europe.
The forecasts highlight the uncertainty surrounding the outlook, as the market faces competing forces from potential supply increases and the risk of further disruptions to oil shipments.
Hurricane Disrupts Gulf of Mexico Operations
Energy companies were also working to restore production following Hurricane Isaias, which made landfall in the Gulf of Mexico early on Saturday.
Major producers Shell, Chevron and BP were seeking to redeploy personnel and resume operations at affected offshore platforms.
Any prolonged disruption to US production could add another source of uncertainty to global energy supplies, depending on the scale and duration of the operational impact.
Oil Prices Rise as Middle East Supply Concerns Grow Amid Shipping Attacks
Russian Diesel Supplies Put Pressure on Fuel Prices
While geopolitical tensions supported crude oil prices, expectations of additional Russian diesel exports weighed on European gasoil futures.
ICE gasoil futures fell 4.3% to $1,419.50 per metric ton after US President Donald Trump said on Friday that Russia would immediately supply more than 300,000 metric tons of diesel to US and global markets, with additional shipments expected later.
However, analysts questioned how quickly the proposed supplies could reach international markets.
PVM analyst Tamas Varga said the immediate impact of the announcement remained uncertain because Russia’s refining capacity had been severely reduced.
Moscow has partially lifted its restrictions on diesel exports, allowing approximately 500,000 metric tons, equivalent to around 3.7 million barrels, to enter the international market.
According to Varga, that volume would be equivalent to roughly one day of US diesel consumption and approximately 13% of global daily demand.
The additional supplies could provide some relief to fuel markets, although their impact will depend on actual export volumes, delivery schedules and the condition of Russia’s refining industry.
Trump Announces Proposed Energy Ceasefire
Trump also announced on Sunday that Ukraine and Russia had agreed to an energy ceasefire.
However, Ukrainian President Volodymyr Zelenskyy said he was still waiting for details of the proposed arrangement, while Russia had not commented on the announcement.
The uncertainty surrounding the reported agreement left investors without clear confirmation of whether it would lead to a sustained reduction in attacks on energy infrastructure or improve the security of regional supplies.
A lasting reduction in hostilities could ease some supply concerns, but the impact on oil prices would depend on the implementation of the agreement and developments elsewhere in the market.
IEA Calls for Faster Diesel Releases
International Energy Agency Executive Director Fatih Birol said member countries should assess whether additional diesel supplies were needed to ease pressure on the market.
He also urged countries that had not fully delivered previously pledged volumes to accelerate releases, with diesel receiving priority.
The call reflects continuing concerns over refined-fuel availability as geopolitical tensions, shipping disruptions and production constraints affect energy markets.
For now, oil prices remain caught between the possibility of additional Russian diesel supplies and the risk of further disruptions across the Middle East. The direction of the market will depend largely on whether new supplies can reach buyers quickly enough to offset the risks facing crude oil production and transportation.
