Oil prices fall as traders assess Russian diesel supply prospects and Saudi-Houthi conflict

Oil prices hovered near $105 per barrel on Tuesday, having slipped slightly from the previous day's $92.84 per barrel as traders assessed the risks posed by attacks on Saudi Arabia and potential Russian fuel deliveries. Brent crude settled at $105.60 per barrel, down $1.01, or 0.95%, from Monday's high of $106.65. The US lifted sanctions on Russian fuel, allowing Moscow to export diesel to global markets, which may help ease tight fuel supplies and alleviate some supply concerns.

However, US officials argued the deal violated existing law barring Russian energy imports until the war in Ukraine ends. Geopolitical tensions in the Gulf, including attacks on oil infrastructure, also kept market sentiment cautious. OPEC and non-OPEC countries lowered their forecast for oil demand growth this year to 400,000 barrels per day, citing ongoing disruptions.

Goldman Sachs predicted Brent crude could plunge to the $60s per barrel in 2027 if Gulf oil production rises faster than expected, but warned that renewed conflict could reverse that trend. Middle East instability has disrupted energy supplies for months, but prices remain far below the $126 per barrel peak observed during the crisis.