Brent crude futures for December delivery rose to $105.68 a barrel on Monday, reversing earlier losses despite President Donald Trump's declaration of an "energy ceasefire" between Russia and Ukraine. U.S. West Texas Intermediate futures for November also climbed 0.95% to $92.72 per barrel. Both benchmarks had fallen by approximately 1.5% earlier in the session before the reversal.
The price movement followed Trump's Sunday social media statement, in which he announced that Russia and Ukraine had agreed to an immediate energy ceasefire. Ukrainian President Volodymyr Zelenskyy welcomed the proposal on Monday but cautioned that Moscow must also comply with the terms. Market participants appear skeptical about the immediate impact on global supplies, as oil prices remained elevated despite the announcement.
Trump has also suggested that Russian energy exports to the global market will increase. On Friday, he stated that Moscow would supply more than 4 million tons of diesel under a deal reached during a phone call with Russian President Vladimir Putin. However, the prospect of these additional supplies reaching the market has not yet translated into lower prices, with traders watching for concrete implementation details.
Geopolitical tensions in the Middle East continue to exert upward pressure on crude prices. The Saudi-led coalition fighting Yemen's Iran-backed Houthis reported it was dealing with another round of drone and missile attacks directed at Saudi Arabia. This development follows a phone call between Iranian Foreign Minister Abbas Araghchi and Saudi Foreign Minister Faisal bin Farhan bin Abdullah, who discussed regional escalation. Al Jazeera reported that Araghchi said Iran was ready to assist in starting dialogue between Saudi Arabia and the Houthis.
Analysts expect oil prices to remain volatile in the near term due to the ongoing U.S.-Iran conflict and weather disruptions. UOB noted in a Monday report that Hurricane Isaias, which strengthened to Category 3 with 120 mph winds as it approached the U.S. Gulf Coast, forced energy producers to curtail offshore output. The bank added that Houthi missile strikes on Riyadh airport on Saturday, which killed 12 people and injured over 300, have materially elevated risk premia in the Middle East.