Oil Prices Dip as Russia-Ukraine Energy Truce Eases Supply Risk
Crude oil prices fell on Monday as the possibility of Russia and Ukraine agreeing to halt attacks on energy infrastructure eased concerns over supply disruptions, while investors took profits following recent price gains.
International benchmark Brent crude futures for December delivery decreased 0.14% to $104.57 per barrel, down from $104.72 at the previous close. US benchmark West Texas Intermediate (WTI) crude futures for November delivery dropped 0.44% to $91.44 per barrel from $91.85.
US President Donald Trump announced on Sunday that Russia and Ukraine had agreed to an immediate ceasefire covering energy infrastructure, urging both sides to uphold the agreement.
The announcement is raising expectations that attacks on Russian oil refineries and export facilities could ease, reducing the risk of global supply disruptions and putting downward pressure on oil prices.
Trump had criticised Ukrainian President Volodymyr Zelenskyy over attacks on Russian refineries and his approach to peace talks, saying Ukraine should elect a new leader.
Zelenskyy responded by proposing a full 60-day ceasefire to allow elections in Ukraine, adding that Kyiv could stop targeting Russian refineries and diesel facilities if Moscow halted attacks on Ukrainian energy infrastructure.
He said Russian attacks had targeted Ukraine’s energy sector 196 times and its oil and natural gas infrastructure 20 times over the past week, describing an end to mutual attacks on energy facilities as a potential first step toward ending the war.
The prospect of fewer attacks eased concerns about disruptions to Russian oil and petroleum product supplies and lowered the geopolitical risk premium in oil prices.
Meanwhile, ongoing supply disruptions in the Gulf of Mexico are preventing a sharper decline in oil prices, despite the gradual resumption of oil and natural gas production that was halted by Hurricane Isaias.
According to the latest data released by the US Minerals Management Administration (MMA), approximately 1.17 million barrels per day of oil production, equivalent to 57.54% of the region’s daily output, remains offline.
Natural gas production outages stand at approximately 1.05 billion cubic feet per day, representing 49.11% of the region’s output.
Energy companies BP and Shell, which suspended production due to the hurricane, have also begun efforts to return personnel to facilities and resume operations as weather conditions improve. NBET Commences N728.98bn Legacy Debt Payments to GenCos
