Oil ticks lower as Russia diesel supply prospects counter Gulf supply risks

Oil prices dipped on Tuesday after a rise of nearly $2 per barrel the previous day, as traders analyzed potential supply risks from attacks on Saudi Arabia and the possibility of extra diesel shipments from Russia. Brent crude futures fell 61 cents, or 0.57%, to $106.04 per barrel by 0000 GMT, while US West Texas Intermediate crude futures dropped 47 cents, or 0.5%, to $93.27 a barrel.

Brent futures closed at $106.65 per barrel on Monday, the highest level since September 15. President Trump announced Russia would supply diesel to global markets, and his administration temporarily lifted US sanctions on Russian fuel to remove revenue from Moscow's war in Ukraine. This move could help ease tightness in global fuel markets and reduce some supply concerns that have driven crude prices recently.

However, US lawmakers from both parties criticized Trump's deal with Putin, saying it may violate US law prohibiting imports of Russian energy until Moscow stops its aggression against Ukraine. Tim Waterer, KCM Trade chief analyst, noted that the market still appears more concerned about the risk of additional attacks in the Gulf than reassured by more barrels.

Fresh diesel supply from Russia and stable Saudi flows are providing some relief, but the market remains worried about the possibility of further disruptions to Gulf energy infrastructure and shipping lanes. Iran-aligned Houthis attacked Riyadh's international airport over the weekend, and tanker attacks were reported near the Strait of Hormuz, threatening to disrupt a recovery in Middle East supplies seen in September.

OPEC has reduced its oil demand growth forecast for the year to 400,000 barrels per day from 1.4 million bpd at the beginning of the year, according to Haitham Al Ghais, Secretary General of the organization.