Oil Prices Fall as Russia Signals Higher Diesel Exports

Oil prices declined on Tuesday as Russia indicated it could increase diesel exports beyond previously announced levels under a supply agreement with the United States, raising expectations of improved global fuel availability.

Despite the pullback, crude oil prices remained near recent highs as investors assessed uncertainty surrounding a proposed Russia-Ukraine energy ceasefire and escalating geopolitical tensions in the Middle East.

Brent crude futures dropped 1.2% to $105.34 per barrel by 02:55 GMT, while U.S. West Texas Intermediate (WTI) crude futures declined 1.3% to $92.48 per barrel. Both benchmarks had gained more than 1% during Monday's trading session.

Russian Deputy Prime Minister Alexander Novak said late Monday that Moscow could restore diesel exports to levels exceeding those outlined in an agreement announced by U.S. President Donald Trump.

Trump previously stated that Russia had agreed to resume diesel supplies to international markets after Washington temporarily eased sanctions on Russian fuel exports.

The agreement comes as global energy markets face tightening fuel supplies caused by disruptions to Middle Eastern oil shipments and refining operations. Additional Russian diesel exports could help ease supply shortages and reduce upward pressure on energy prices.

Meanwhile, uncertainty surrounding Trump's announcement of an energy ceasefire between Russia and Ukraine continued to influence oil market sentiment.

Ukrainian President Volodymyr Zelenskiy told Axios that the proposed ceasefire was "news for me," although he indicated Ukraine would support the arrangement if Russia agreed to participate.

Oil prices initially weakened following Trump's announcement before recovering as fresh security concerns emerged across the Middle East.

Over the weekend, Yemen's Iran-backed Houthi militants targeted civilian facilities and energy infrastructure in Saudi Arabia, intensifying fears of further disruptions to regional oil production and transportation.

Trump subsequently suggested that Washington could provide assistance to Saudi Arabia in responding to the Houthi attacks.

Tensions between the United States and Iran also remained elevated over the strategically important Strait of Hormuz, a critical passage for global crude oil shipments.

Although shipping activity through the waterway briefly improved in September, renewed Iranian attacks this month have disrupted maritime traffic and restricted oil flows.

The combination of potential Russian supply increases and persistent Middle East security risks has left global oil markets balancing expectations of improved fuel availability against continuing threats to energy supplies.