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Oil futures moved lower in early trading on Monday as positive signals from diplomatic efforts in Eastern Europe encouraged some profit-taking following a period of elevated prices tied to multiple geopolitical flashpoints. Brent crude futures declined more than one percent to reach US$103.18 per barrel while West Texas Intermediate crude fell to approximately $90.55. The shift came as market participants weighed the potential for additional barrels to reach global markets in the coming weeks.
The Star reported that President Trump unexpectedly stated on Sunday that Ukraine and Russia had agreed to halt attacks on each other’s energy facilities following a separate diesel-supply arrangement with Moscow. Ukrainian President Volodymyr Zelenskiy responded that he was still reviewing the specifics of the understanding. KCM Trade chief analyst Tim Waterer said the news eased immediate supply pressures although he cautioned that questions remain over whether the ceasefire will hold and for how long.
Regional developments in the Middle East continued to support a floor under crude values despite the session’s losses. The Houthis claimed a strike on Riyadh’s international airport over the weekend that resulted in 13 deaths and more than 300 injuries with Saudi authorities reporting additional casualties from a subsequent attack. United States officials signaled consideration of joining Saudi responses against the group adding to the complex risk picture that has kept Brent above the $100 level for much of the past month.
An International Energy Agency assessment from September 2026 projected that world oil demand will decline by 2.5 million barrels per day this year a steeper drop than previously expected partly due to delayed normalization of certain supply streams. Benchmark North Sea Dated crude had averaged $91 per barrel in August before climbing sharply in early September amid heightened tensions. Physical market conditions have shown signs of weakness with buyers deferring purchases and drawing down inventories in anticipation of possible additional availability.
Vessel tracking information indicated that Persian Gulf oil flows have recovered modestly but still average only about 7 million barrels per day against pre-conflict levels near 20 million. A more sustained recovery would require further diplomatic steps including potential easing of sanctions on key producers. Industry observers noted that the physical market has weakened with discounts on several crude grades widening in recent sessions.
Banking sector analysis from ABN AMRO described oil markets as remaining tight overall despite coordinated releases from strategic reserves that have offered only limited price relief. Low inventory levels and constrained infrastructure leave the complex vulnerable to sudden disruptions. The futures curve continues to display backwardation reflecting persistent demand for prompt barrels over longer-dated contracts.
