GLOBAL — Oil prices declined on Tuesday as traders weighed ongoing geopolitical threats to energy supplies against the possibility that additional Russian diesel exports could ease tightness in fuel markets.

Brent crude futures dropped $1.62, or 1.52%, to $105.03 a barrel by 0820 GMT. U.S. West Texas Intermediate crude futures also fell, losing $1.66, or 1.77%, to reach $92.08 a barrel.

The pullback came after both benchmarks gained nearly $2 a barrel during the previous session. Brent had closed at its highest level since September 15.

Market sentiment was influenced by U.S. President Donald Trump’s announcement that Russia had agreed to supply diesel to international markets. His administration had also temporarily suspended U.S. sanctions on Russian fuel that were designed to limit Moscow’s revenue for its war on Ukraine.

The prospect of additional exports could ease pressure on global fuel markets and reduce supply concerns that have supported crude prices. However, the amount of fuel Russia will ultimately be able to deliver remains unclear.

PVM Oil Associate Analyst Tamas Varga expressed doubts about Russia’s ability to achieve its stated target of supplying 3 million to 3.5 million tons of diesel per month by the end of the year. He pointed to the difficult condition of the country’s refining sector as a significant barrier.

The agreement has also drawn criticism from lawmakers in the United States. Members of both major political parties argued that Trump’s arrangement with Russian President Vladimir Putin appeared to contradict U.S. legislation barring Russian energy imports until Moscow ends its aggression against Ukraine.

At the same time, security threats continued to cloud the outlook for energy exports from the Middle East. Iran-aligned Houthi forces attacked Riyadh’s international airport over the weekend, while reports of tanker attacks emerged near the Strait of Hormuz.

These incidents have heightened concerns over the security of Gulf energy infrastructure and the shipping corridors used to transport crude oil and refined petroleum products. According to Varga, persistent tensions in Eastern Europe and the Middle East have maintained a risk premium in oil prices.

OPEC and participating non-OPEC producers have also highlighted the growing burden of transportation costs. Ministers said shipping and insurance expenses had climbed to unprecedented levels, exceeding one-third of a commodity’s value and complicating the movement of crude oil and petroleum products.

These challenges coincide with a downward revision to the group’s demand outlook. OPEC Secretary General Haitham Al Ghais said the organization had cut its forecast for oil-demand growth this year to 400,000 barrels per day, from 1.4 million barrels per day at the beginning of the year.

The latest price movements reflect opposing pressures in the energy market. The possibility of increased Russian diesel exports could help alleviate supply shortages, while uncertainty about actual export volumes and continued threats to energy infrastructure remain major concerns for traders.

For energy markets, whether additional fuel supplies can reach consumers will be just as important as announcements about future production. Until the supply outlook becomes clearer, geopolitical tensions, rising shipping costs and expectations for demand are likely to remain key factors influencing oil prices.

Original article