On October 13, oil prices declined as investors evaluated the potential impact of increased Russian diesel supplies on global energy markets, while ongoing tensions between Saudi Arabia and Houthi militants limited the extent of losses [1]. Brent crude futures dropped 1.48% to $105.05 per barrel, and U.S. West Texas Intermediate futures fell 1.57% to $92.27 [1]. President Donald Trump announced that Russia had agreed to boost diesel supplies to global markets, and defended his administration's decision to temporarily ease restrictions on Russian diesel imports despite bipartisan criticism from U.S. lawmakers concerned about undermining sanctions related to Moscow's war in Ukraine [1]. The agreement allows Russia to supply diesel to U.S. and global markets for six months [1].
Goldman Sachs estimated that the additional Russian diesel supply—an increase of 800,000 metric tons, or roughly 6 million barrels—would only lower wholesale diesel prices in the U.S. Gulf Coast and Europe by $1 to $2 per barrel, suggesting limited relief for strained global fuel markets [1]. The bank noted that Russian refinery outages had surged by 3 million barrels per day compared to the previous year, restricting Moscow's ability to ramp up production [1]. Global diesel markets remain under significant strain, with U.S. inventories down 14% year-on-year and visible stocks in China falling 11% [1]. Goldman Sachs attributed these shortages to seven consecutive months of declining global diesel production, with seaborne exports dropping by 1.4 million barrels per day, or 20%, year-on-year [1].
Meanwhile, geopolitical risks persisted as Iran-backed Houthi militants in Yemen attacked King Khalid International Airport in Riyadh, Saudi Arabia, resulting in 12 deaths and over 300 injuries in a major escalation [1]. These concerns helped limit the decline in oil prices, as traders weighed the potential for further disruptions in the region [1].
CONCLUSION
Oil prices fell amid expectations of increased Russian diesel supply, but the impact on global fuel prices is projected to be modest according to Goldman Sachs. Persistent supply shortages and escalating geopolitical tensions in Saudi Arabia continue to exert upward pressure, keeping market sentiment cautious.