Brent crude oil prices in the North Sea, as of 3:29 AM GMT on Tuesday, decreased by $1.30, or 1.2%, to $105.35 per barrel. Meanwhile, WTI crude oil prices in the U.S. traded at $92.49 per barrel, down $1.25, or 1.3%.
Factors Influencing Oil Prices
This decrease in oil prices follows an assessment of supply risks due to attacks on Saudi Arabia and the potential increase in diesel supply from Russia. Additionally, both oil benchmarks saw an increase of about $2 in trading on Monday (October 20), with Brent reaching its highest level since September 15.
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Global Energy Market Developments
Donald Trump, the President of the United States, announced that Russia has agreed to supply diesel to global markets, and his administration has temporarily lifted sanctions on Russian fuel. This move could help alleviate fuel shortages in global markets and reduce concerns about supply that had recently driven up crude oil prices.
However, concerns about the vulnerability of energy infrastructure and supply routes in the Gulf remain. Conflicts threaten the recovery of Middle Eastern oil supply in September and have heightened fears of further disruptions in one of the world's most critical energy transit routes.
Tim Waterer, a senior analyst at KCM Trade, stated that the supply of diesel from Russia and the flow of crude oil have somewhat stabilized the market, but market concerns over the risk of attacks on ships or pipelines in the Gulf region still loom large. He added, "As long as we do not see clearer signs of de-escalation, the price trend remains upward."
Meanwhile, the oil and energy ministers of the Organization of the Petroleum Exporting Countries (OPEC) and its allies (OPEC+) announced that transportation and insurance costs have risen to unprecedented levels, accounting for more than one-third of the value of goods, hindering the efficient movement of crude oil and petroleum products. Haitham Al-Ghais, OPEC's Secretary-General, also announced on Monday that the organization has revised its forecast for daily oil demand growth this year down from 1.4 million barrels at the beginning of the year to 400,000 barrels.
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