Oil prices rose on Monday as President Trump's "energy ceasefire" between Russia and Ukraine appeared to unravel. Russia struck Ukrainian energy facilities, and Kyiv signalled more attacks on Russian refineries. Diesel prices stay near their Iran wartime highs despite a Russian export deal.
Oil climbed on Monday after the ceasefire announced by Trump appeared to fall apart. Russia struck Ukrainian power and gas facilities, and Ukrainian President Volodymyr Zelenskyy signalled that Kyiv would keep attacking Russian refineries.
Brent crude rose 2% to $106.80 a barrel, according to the Financial Times. The US benchmark, West Texas Intermediate, was also up 2% at $93.70 a barrel.
A ceasefire contested within hours
On Sunday, Trump wrote on Truth Social: "Effective immediately, there is an ENERGY CEASEFIRE in the War between Russia and Ukraine". Zelenskyy told the Warsaw Security Forum on Monday that Russia launched a targeted strike immediately after the post. He added that Ukraine would respect a ceasefire agreement if Russia is ready to do the same.
The Kremlin's spokesperson did not comment on the ceasefire to reporters on Monday. Meanwhile, Jim Reid, global head of macro research at Deutsche Bank, said the overnight strikes make the ceasefire increasingly uncertain and highlight strains between Washington and Kyiv.
Diesel stays near wartime highs
The ceasefire followed an agreement Trump announced with Moscow on Friday, releasing Russian diesel into the global market as Washington aims to quell fuel prices ahead of November's midterm elections. US wholesale diesel fell 3% on Friday afternoon and was broadly flat on Monday at about $4.75 a gallon. European diesel fell 2.3% on Monday to $1,449 a tonne.
Even so, US diesel sits about 75% above its prewar level, and European diesel about 95% higher. Analysts said the small scale of the promised Russian exports would have very little impact on global supplies in the short term. Larger exports over time would depend on Russia repairing refineries battered by Ukraine.
Anthony Yuen, head of energy strategy at Citigroup, said last week's resumption of Chinese refined oil product exports was adding support to the fall in diesel prices. He said the Chinese export volume could be on par with or larger than the Russian volume.
Source: Financial Times
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