Writer Clarence | by AfterPost | 12 October 26 ---- Yes, oil prices slipped Monday Oct 12 after Trump announced a Russia-Ukraine energy ceasefire, even with Houthi missiles hitting Saudi Arabia and tankers in the Gulf.
Brent crude fell $1.54 or 1.47% to $103.18 a barrel early Monday, later trading at $104.61. US West Texas Intermediate dropped to $90.31, later $91.36, according to Reuters. ICE gasoil futures — the diesel benchmark — fell 3% to $1,436 per metric ton.
Traders are betting on more Russian fuel after two Trump announcements:
1. Diesel deal Oct 10: Russia to ship 300,000 tons diesel immediately, 500,000 tons in November, 1 million tons after, with temporary US sanctions relief.
2. Energy ceasefire Oct 11: Trump on Truth Social: "Effective immediately, there is an ENERGY CEASEFIRE in the War between Russia and Ukraine. Both parties have agreed."
Zelenskyy said he was "seeking details" and "Ukraine supports the ceasefire if Russia does." Russia has not confirmed. Same pattern as April, when Trump announced a 30-day energy truce that Zelenskyy said was never finalized and collapsed in 24 hours.
Why oil fell despite Middle East escalation
Over the weekend, Houthis claimed a strike on Riyadh International Airport killing at least 12 — deadliest attack on Saudi soil in a decade — plus another attack Sunday. More tanker attacks reported in Strait of Hormuz. Normally that spikes Brent $5-7.
This time, Russian supply hopes offset it. Analyst Tim Waterer, KCM Trade: "Questions remain over validity and longevity of any such ceasefire, and without clearer evidence that it will actually hold, the extent of the pullback is likely to stay limited."
IEA Executive Director Fatih Birol added all members should assess diesel releases and accelerate remaining volumes, prioritizing diesel.
Why an energy ceasefire moves oil prices
In 2026, energy is the real front:
- Ukraine hit 20+ Russian refineries with FP-1 drones since August. Each hit cuts $10-20M daily revenue. Russian diesel exports fell 12% — tight global market.
- Russia hit Ukrainian power plants to cause winter blackouts and force EU electricity imports.
- When refineries stop burning, diesel supply returns, crude and gasoil prices fall. When they burn, US diesel hit $6.28/gallon AAA average, oil up 50% since January.
This is why one Truth Social post moved Brent $1.50.
What this means for inflation and Wall Street
Wall Street shrugged — S&P futures up Monday. But oil still 50% pricier than January. That shows at pump and in US CPI due this week.
If ceasefire holds: Russian refineries restart, diesel flows, pump prices could drop $0.30-0.50 in 3 weeks.
If it breaks: Market snaps back, Brent back to $110+, plus Houthi risk premium.
What to watch next
1. Kremlin confirmation — no deal without it
2. Satellite: Are FP-1 drones still hitting Kirishi, Ryazan refineries in next 48h?
3. Diesel futures Monday open — real vote of confidence
4. US inflation data — oil's impact
FAQ
Why did oil prices drop today?
Expectation of more Russian diesel after Trump announced 300k tons immediate supply and an energy ceasefire between Russia and Ukraine.
How much is oil now?
Brent around $103-$104, WTI around $90-$91 on Oct 12, down over 1% despite Houthi attacks on Saudi.
What is energy ceasefire?
Only energy infrastructure — both sides stop hitting refineries, power plants, depots. Front-line fighting continues.
Will the energy ceasefire hold?
Unclear. Last April attempt collapsed. Zelenskyy says no deal finalized, Russia silent. Market pullback limited for that reason.
Why is oil still 50% up since January?
Ukrainian refinery strikes cut global diesel, Iran-Israel war spillover, Houthi tanker attacks, refinery maintenance, plus $6.28 US diesel demand.
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