Oil falls on hopes Russia-Ukraine energy ceasefire will boost supplies

Oil prices experienced a decline on Monday as investors anticipated increased Russian energy supplies following a reported agreement between Ukraine and Russia to cease attacks on each other's energy facilities. The deal was announced by US President Donald Trump, who also disclosed that Russia would provide over 300,000 metric tons of diesel to US and global markets, with additional shipments in November and afterward.

Brent crude futures dropped 1.47% to $103.18 a barrel, while US West Texas Intermediate crude fell 1.68% to $90.31 a barrel. ICE gasoil futures decreased by 3% to $1,436 per barrel. Globally, daily diesel consumption is expected to reach nearly 29 million barrels, according to the International Energy Agency. However, Ukrainian President Volodymyr Zelenskiy expressed uncertainty about the specifics of the energy ceasefire, and Russia refrained from commenting on the matter.

Analysts noted that while the reported ceasefire eased some supply pressure, it remained unclear whether the agreement would hold, limiting the extent of the pullback in prices. The ongoing conflict in the Middle East, including attacks on Saudi Arabian infrastructure and the threat of further attacks on tankers in the Strait of Hormuz, continued to support Brent crude prices above $100 a barrel.

Despite Goldman Sachs raising its December 2026 Brent crude price forecast to $90 a barrel, analysts cautioned that continued Middle East supply adaptation and potential renewed escalation posed significant net upside risk.