Oil prices fall 1% as traders eye potential rise in Russian diesel supply

Oil prices fell by about 1% on Tuesday, following a nearly $2 per barrel jump in the previous session, as traders weighed supply risks from Middle East tensions and the possibility of increased diesel shipments from Russia.

Brent crude futures dropped $1.31, or 1.23%, to $105.34 per barrel, while US West Texas Intermediate crude futures declined $1.19, or 1.27%, to $92.55 per barrel.

According to Reuters, US President Donald Trump said Russia had agreed to supply diesel to global markets, and that his administration had temporarily lifted US sanctions on Russian fuel. These sanctions were originally imposed to deprive Moscow of revenue that could be used in its war with Ukraine.

The additional supplies could help ease tightness in global fuel markets, alleviating some of the supply concerns that have recently supported crude prices.

Tim Waterer, chief market analyst at KCM Trade, told the agency that new Russian diesel supplies and steady oil flows from Saudi Arabia offer some relief. However, he noted that the market remains more concerned about the risk of further attacks on ships or pipelines in the Gulf than reassured by the extra supplies.

Meanwhile, concerns persist over the vulnerability of energy infrastructure and shipping lanes in the Gulf, amid reports of attacks on tankers near the Strait of Hormuz.