International oil prices fell on Monday as expectations for improved supply gathered momentum.
U.S. President Trump stated that Russia and Ukraine will no longer attack each other's energy facilities and announced that the two sides had reached an "energy ceasefire." At the same time, after Houthi forces attacked Saudi Arabia, Iran took the initiative to contact Saudi Arabia, which the market also viewed as a signal that geopolitical tensions could ease.
Specifically, Brent crude December futures fell 1.65% to $102.99 per barrel, while U.S. West Texas Intermediate crude November futures fell 1.92% to $90.09 per barrel.
In a social media statement, Trump said: "Effective immediately, there is an energy ceasefire in the Russia-Ukraine war. Both sides have agreed. Do not break it!" Ukrainian President Zelensky later said on social media that Ukraine supports the ceasefire and stressed that it is "important" that Russia also supports it.
The supply side also received another potential positive development. Trump said on Friday that, under an agreement reached in his phone call with Putin, Russia will supply more than 4 million tons of diesel to global markets, raising expectations that more Russian energy will enter the market.
On the geopolitical front, according to the Saudi state news agency, Iranian Foreign Minister Araghchi called Saudi Foreign Minister Faisal to discuss the recent escalation in the region and efforts to respond to it. Al Jazeera reported that Araghchi said Iran is prepared to offer assistance to help Saudi Arabia launch dialogue with the Houthi forces in Yemen.
However, the market still faces multiple risks. United Overseas Bank said in a Monday report that Hurricane Isaias has strengthened into a Category 3 hurricane with wind speeds of 120 miles per hour and is approaching the U.S. Gulf Coast, forcing energy producers to cut offshore output, and upward pressure on oil prices may remain. The bank also said that the Houthi missile attack on Riyadh airport in Saudi Arabia on Saturday killed 12 people and injured more than 300, significantly raising the Middle East risk premium. In addition, the ongoing U.S.-Iran conflict is also expected to keep oil prices volatile in the short term.
Overall, expectations of improved supply have temporarily weighed on oil prices, but risk factors such as the hurricane, Middle East attacks, and the U.S.-Iran situation remain, and the crude oil market may continue to fluctuate in a battle between bulls and bears in the short term.