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Oil edged lower on Monday, but not by much, and not for long enough to say the market has changed its mind. Brent crude futures fell about 1.3 percent to roughly $103.35 a barrel during Asian and European trading on October 12, while US West Texas Intermediate (WTI) dipped to around $90.50, according to market snapshots from ABC News and other outlets. Quotes varied across sources during the session, with figures ranging from about $103 to $104, because prices moved in thin early trading and different services time-stamp them differently.
The immediate reason for the dip was Russia. Over the weekend, President Donald Trump said Russia and Ukraine had agreed to stop attacking each other’s energy facilities, following a deal announced on Friday under which Russia would supply extra diesel to the United States and global markets. Reuters reported that ICE gasoil futures, the benchmark for diesel, fell 3 percent to $1,436 a metric ton after Trump said Russia would immediately supply more than 300,000 metric tons, or about 2.25 million barrels. Investing.com’s account of the same deal cited a much larger figure, about 13.5 million barrels, and noted that US sanctions on Russian diesel would be temporarily eased. The difference is large enough that it should be treated as unresolved until Washington or Moscow publishes the terms.
Analysts at ING, quoted in the Investing.com report, said the ceasefire still needed confirmation from both sides and that the oil move was probably less to do with developments in the Middle East and more to do with Russia. That reading fits the fact that diesel fell more than crude. Ukraine’s strikes on Russian refineries and ports had cut global diesel supply in recent weeks, and Russia has barred exports of most diesel, jet fuel and gasoline since July, with the restriction recently extended through October. Anything that suggests those barrels could return eases the tightest part of the market first. Yet as of Monday, neither Kyiv nor Moscow had formally confirmed the arrangement, and Ukrainian President Volodymyr Zelensky said Russian attacks were still happening.
The Middle East explains why Brent barely budged. The Houthi movement said it struck King Khalid International Airport in Riyadh on Saturday, an attack that killed 13 people and wounded more than 300 according to ABC’s reporting, and a second attack on Sunday killed one person and injured 11, Investing.com said. Trump told reporters the United States may join Saudi strikes on the Houthis. In the Strait of Hormuz, eleven tankers came under attack in the week that ended October 4, according to Trading Economics, and a large fleet of tankers has been tied up in ship-to-ship transfers outside the strait, which has pushed global freight rates to record levels and reduced vessel availability on other routes.
There were also tentative signs of diplomacy. Trump said earlier this week that he would not strike Iran again before the November midterm elections, citing productive discussions with Tehran. Iran’s security chief Mohsen Rezaei said the United States had accepted some of Tehran’s seven conditions for reopening Hormuz while others remain unclear, and called Washington’s response inadequate. Jefferies strategist Mohit Kumar said it is in the interest of both Iran and the United States to reach a ceasefire. These are statements of intent, not agreements, and traders have heard such talk before. Hormuz carries roughly a fifth of the world’s oil and gas flows, and it was effectively shut in April, when Brent hit the highest level in nearly four years and the dated Brent benchmark rose above $140, a level not seen since 2008, Trading Economics reported.
Look at what sits underneath the headline number. Analysts quoted by Reuters estimated that Brent carries a risk premium of just over $20 a barrel, meaning that without the geopolitical threat the price would be around $80. They maintained a base case that continued adaptation of Middle East supply will eventually bring crude prices down, while warning that renewed escalation poses significant upside risk. SPI Asset Management’s Stephen Innes said the market is no longer paying the full geopolitical premium on every headline, which helps explain why Brent held above $100 even after a day with a deadly airport strike. In effect, traders are discounting each new piece of news a little more than they did in the spring.
The gap between Brent and WTI is another clue. At roughly $103 and $90.50, the spread is close to $13 a barrel, wider than normal. The same analysts said WTI is unusually low compared with Brent because of high US-Europe shipping costs, which makes it expensive to move American crude to the markets that want it. That bottleneck keeps US crude cheaper at home even as global prices stay high, and they forecast WTI to average $81 in December 2026 and $73 in 2027. Those are forecasts, not guarantees, and they rest on assumptions about shipping and supply that could change quickly.
For governments and consumers, the picture is mixed. Brent above $100 means expensive fuel in import-dependent countries, and the tightness in diesel is the most acute problem because it feeds directly into freight and farming costs. The International Energy Agency’s executive director Fatih Birol said all IEA members should assess whether additional diesel stock releases are needed and that countries which have not fully delivered pledged volumes should accelerate them, prioritising diesel, according to ABC’s live coverage. For oil exporters such as Nigeria, which pumped about 1.68 million barrels a day in August, high prices lift potential revenue, though higher costs for imported refined products offset some of the benefit, a point that is at the centre of the current debate over pump prices.
The wider financial backdrop adds pressure. The US Federal Reserve raised interest rates in September, Treasury yields have climbed above 5 percent, and the strong dollar and expensive credit tend to weigh on commodity demand over time. So far, supply fears have outweighed demand worries, but the balance can shift if growth slows. Last week’s price action shows how fine the balance is: Brent rose about 1.5 percent on the week, as Trading Economics noted, despite a series of swings in either direction.
What to watch now is straightforward. First, whether Moscow and Kyiv confirm the energy ceasefire and whether strikes on refineries and power plants actually stop. Second, the size and timing of Russian diesel exports, and whether the figure is closer to 2.25 million barrels or 13.5 million. Third, any change in the US-Iran talks over reopening Hormuz, and further attacks on tankers or Saudi infrastructure. Fourth, official inventory data and stock releases from the IEA, which publishes its guidance on the International Energy Agency website. ABC News has a running summary of the day’s oil moves in its live market coverage.
Readers who follow global energy, markets and technology can find more coverage at BusinessTech Nigeria. For now, Brent’s modest fall shows a market that is willing to price in good news from Russia but unwilling to look past the Gulf.
