MOSCOW, Oct 13 — Oil prices fell on Tuesday, as traders assessed supply risks from attacks on Saudi Arabia while weighing the prospect of additional diesel supplies from Russia.
Brent crude futures dropped US$1.62, or 1.52 per cent, to US$105.03 a barrel by 0820 GMT, while U.S. West Texas Intermediate crude futures were down US$1.66, or 1.77 per cent, at US$92.08 a barrel.
Both benchmarks climbed nearly US$2 a barrel in the previous session, with Brent settling at its highest since September 15.
United States (US) President Donald Trump said Russia had agreed to supply diesel to global markets, and his administration temporarily lifted US sanctions on Russian fuel designed to deprive Moscow of revenue for its war on Ukraine.
Additional supplies could help alleviate tightness in global fuel markets, tempering some of the supply concerns that have supported crude prices recently.
"Russia's promise to supply three to 3.5 million tons per month by the end of the year is unlikely to be accomplished, given the dire state of the country's refining sector," said PVM Oil Associate Analyst Tamas Varga.
Lawmakers from both parties in the US complained Trump's agreement with Putin appears to violate US law barring imports of Russian energy until Moscow ends its aggression against Ukraine.
Concerns over the vulnerability of Gulf energy infrastructure and shipping lanes remained in focus after Iran-aligned Houthis struck Riyadh's international airport over the weekend, while tanker attacks were reported near the Strait of Hormuz.
Varga added that the lack of progress in de-escalation in Eastern Europe and the Middle East kept the risk premium elevated, as rising attacks on commercial tankers and Houthi-Saudi tensions ensured exports from the region would not approach the highs seen in September.
Ministers of OPEC and non-OPEC Participating Countries in the Declaration of Cooperation said shipping and insurance costs have surged to unprecedented levels of over one-third of the commodity value, impeding efficient movement of crude oil and products.
On Monday, OPEC Secretary General Haitham Al Ghais said that the organisation has revised down its oil demand growth forecast for this year to 400,000 barrels per day from 1.4 million bpd at the start of the year, in line with developments throughout the year.
