Oil prices opened lower on Monday as traders anticipated a potential boost in diesel supply from a deal between U.S. President Donald Trump and Russian President Vladimir Putin. The modest decline came despite prices remaining significantly higher than a week ago. Brent crude was trading at $107.84 per barrel, while West Texas Intermediate was at $100.29 per barrel. This marks a slight drop from previous levels but still reflects elevated prices compared to earlier in the week.
The price dip followed Trump’s signing of an executive order lifting sanctions on Russian energy, which had been imposed under the Lindsay O. Graham Act. The agreement aims to supply 2.3 million barrels of diesel to the U.S. and other countries this month, with additional volumes planned for November and beyond. Analysts note these volumes are not large enough to impact the global diesel market significantly, yet traders reacted with caution.
Uncertainty over the deal’s effectiveness and the duration of the sanction exemption contributed to the price movement. Meanwhile, tensions in the Strait of Hormuz continue to affect oil flows, with Kpler reporting a sharp decline in the seven-day moving average of tankers passing through the waterway. These geopolitical risks remain a key factor in market sentiment.
While the diesel deal may provide temporary relief at the pump, analysts caution that it is unlikely to resolve long-term supply issues. The modest price drop highlights the market’s sensitivity to both geopolitical developments and the potential for future supply adjustments.