Oil Market at a Crossroads: Russia Ceasefire Deal and Escalating Hormuz Clashes

At a glance: Brent fell to $103.18 and West Texas Intermediate to $90.31 at the start of today's trading, in response to Russia's pledge to immediately inject 300,000 tons of diesel into the market. Volatility persists due to ambiguities in the details of the Russia-Ukraine energy ceasefire and traders' doubts about the sustainability of supply pledges. Maintaining the price floor […]

The price of Brent dropped to $103.18 and West Texas Intermediate to $90.31 at the start of trading today in response to Russia's promise to immediately inject 300,000 tons of diesel into the market.

Volatility not subsiding due to uncertainties in the details of the Russian-Ukraine energy ceasefire and traders' doubts about the sustainability of supply promises.

Maintaining the price floor by relying on the escalation of geopolitical risks, including Houthi attacks on Riyadh airport and the insecurity of oil tankers in the Strait of Hormuz.

Goldman Sachs forecasts Brent to stabilize at $90 by the end of the year, taking into account the $20 risk, along with the resumption of oil activity in the Gulf of Mexico.

Global oil markets opened on Monday, October 12, 2026 with lower prices. Expectations of increased energy supply from Russia weighed on prices, while conflicts in the Middle East and ongoing attacks on oil tankers in the Strait of Hormuz limited the extent of the decline.

Brent crude oil futures fell by $1.54 to $103.18 per barrel, and West Texas Intermediate (WTI) crude oil prices fell by 1.68% to $90.31. Of course, at the time of setting the news, the global price of Brent oil increased to more than 106 dollars per barrel.

In European markets, ICE diesel contracts also decreased by 3% to $1,436 per barrel.

The impact of the energy agreement and Russian diesel supply plan on prices

In recent days, Donald Trump has announced the shipment of diesel from Russia. The President of the United States announced that Russia will immediately supply more than 300,000 tons or approximately 2.25 million barrels of diesel fuel to the American and international markets.

Trump stated that 500,000 tons of diesel fuel will be shipped in November, followed by another 1 million tons. According to estimates of the International Energy Agency (IEA), the daily consumption of diesel in the world is approximately 29 million barrels.

Of course, uncertainty about the Russia-Ukraine energy ceasefire continues. On October 11, Trump announced that Russia and Ukraine had agreed to cease mutual attacks on energy facilities. However, Ukrainian President Volodymyr Zelensky said they were waiting for details of the deal. Russia has not commented on this either.

Tim Waters, senior analyst at KCM Trade, said the developments had eased short-term supply pressures, but uncertainties remained about the implementation and sustainability of the ceasefire.

In the meantime, Fatih Birol, Director General of the International Energy Agency, asked the member countries to evaluate the need to release more diesel to the market and accelerate the previous deliveries.

Middle East tensions and shipping security threat in Hormuz

On the other hand, the attacks in the Middle East support the increase in oil prices. In this regard, the Yemeni Houthis took responsibility for the October 10 attack on Riyadh International Airport, which killed 13 people and injured more than 300 people. The next day, Saudi authorities announced a new attack on the airport, which also resulted in casualties.

Trump announced that the United States is considering joining Saudi Arabia's military operation against the Houthis.

The UK Maritime Trade Operations Organization (UKMTO) also said two separate attacks on oil tankers were reported over the weekend. An oil tanker near Oman's Sohar region was hit by a drone, and another oil tanker passing through the Strait of Hormuz was damaged by an unidentified projectile.

A surge in attacks on oil tankers in October raised concerns about a renewed disruption to Middle East oil exports, after recovering in September.

Analysts' outlook and production situation in the Gulf of Mexico

Goldman Sachs raised its forecast for Brent oil prices. The company increased its estimate of Brent crude oil price in December from $85 to $90. Analysts such as Don Stryvion said that improving supply conditions in the Middle East could lower prices over time, but a re-escalation of the conflict poses a risk of price increases.

This bank calculated the geopolitical risk caused by the price of oil at slightly more than 20 dollars per barrel. The company said it expects WTI crude oil prices to average $81 in December 2026 and $73 in 2027. The high price difference between Brent and WTI is attributed to the increase in US and European sea freight costs.

In the meantime, oil production resumes in the Gulf of Mexico. Efforts to resume production at Gulf of Mexico energy facilities are accelerating after Hurricane Isaiah hit the Florida coast. Shell, Chevron and BP are preparing to send personnel to offshore platforms and normalize production activities.