Brent crude for December delivery rose 0.92% to $105.68 a barrel early Monday, reversing an earlier fall of around 1.5%. The rebound came after Donald Trump announced an energy ceasefire between Russia and Ukraine, but the market move shows that traders are not treating the statement as proof of a near-term supply increase. West Texas Intermediate also recovered, reaching $92.72 a barrel.
Prices turn higher after early losses
Both oil benchmarks initially declined by around 1.5% during the session before turning upward. Brent’s gain put the December contract above $105, while November WTI rose 0.95% to $92.72. The reversal left prices higher despite the possibility that an easing of hostilities could eventually support more energy exports.
The immediate price action points to uncertainty over how much the announcement changes barrels available to buyers. A ceasefire declaration is not itself a confirmed increase in production or deliveries, and the supplied material offers no timetable for additional supply linked to the Russia-Ukraine agreement.
Ceasefire announcement leaves questions
Trump said on Sunday that Russia and Ukraine had agreed to an energy ceasefire, which he described as effective immediately. Ukrainian President Volodymyr Zelenskyy welcomed the proposal but said Moscow must also agree. That condition leaves the implementation of the announcement unresolved in the information available.
The distinction matters for oil traders: the statement signals a possible change in the conflict’s effect on energy flows, but does not establish that supply has already increased. Prices reversing their losses suggests the market is weighing the announcement alongside other risks, rather than assuming the ceasefire will quickly bring additional crude or fuel onto the market.
Diesel pledge adds a separate supply prospect
A separate possible source of additional supply is diesel. Trump said on Friday that Russia would provide more than 4 million tons of diesel to the global market under a deal he said he reached with Vladimir Putin during a phone call. That volume is a stated prospective commitment, not confirmation in the source material that the diesel has arrived or entered the market.
The diesel pledge and the energy ceasefire are distinct developments: one concerns a promised quantity of fuel, while the other concerns an agreement to halt attacks on energy infrastructure. Together they offer a potential route to better supply, but the lack of delivery details or a schedule leaves the scale and timing of any market effect uncertain.
Middle East risks offset supply optimism
Oil also faced fresh geopolitical pressure on Monday as the Saudi-led coalition fighting Yemen’s Iran-backed Houthis said it was responding to another wave of drone and missile attacks directed at Saudi Arabia. The attacks add to concerns about regional security at a time when traders are already considering whether the Russia-Ukraine announcement can alter supply expectations.
Iranian Foreign Minister Abbas Araghchi spoke by phone with Saudi Foreign Minister Faisal bin Farhan bin Abdullah about the regional escalation and efforts to address it, Saudi state news agency reported. Al Jazeera reported that Araghchi said Iran was ready to help start dialogue between Saudi Arabia and the Houthis. Those diplomatic contacts offer a possible path to de-escalation, but the reported attacks underline that the risk has not disappeared.
Hurricane Isaias adds a US supply concern
The source material also points to Hurricane Isaias as a potential constraint on US energy output. UOB said the storm had strengthened to Category 3, with winds of 120mph, as it approached the US Gulf Coast, prompting energy producers to curtail offshore production. The storm therefore adds a near-term supply concern alongside the uncertain effect of the ceasefire.
UOB also cited Houthi missile strikes on Riyadh airport on Saturday, saying they killed 12 people and injured more than 300, and that the incident had materially raised Middle East risk premia. With offshore output being curtailed and regional tensions unresolved, the available facts explain why the prospect of more Russian diesel has not been enough to prevent Brent from climbing back above $105.
Takeaway: Brent’s rise to $105.68 reflects a market balancing possible Russian fuel supply against uncertain ceasefire implementation, storm-related disruption and Middle East tensions.
