London, 13 October 2026 — EBM Newsdesk Analysis — By Brad Adams
Oil fell on Tuesday for the first time in nearly a week. A deal between Washington and Moscow to bring more Russian diesel to world markets eased some of the pressure on refined fuels. Brent dropped 1.2% to about $105.35 a barrel and WTI fell 1.3% to $92.49. Both benchmarks remain near the top of their recent range, and Brent had settled at its highest level since mid-September the day before.
Donald Trump said Russia would supply more than 300,000 tonnes of diesel immediately, with more to follow, and his administration temporarily lifted US sanctions on Russian fuel. European gasoil futures fell sharply on the news. That matters for a continent where, as our refining margins analysis showed, diesel has been the tightest part of the market.
Why the Diesel Deal Only Goes So Far
There are reasons to doubt it will have much effect. Ukrainian drone strikes have badly reduced Russia’s refining capacity, and analysts question how much extra fuel Moscow can actually export. US lawmakers from both parties argue the deal may breach a law banning Russian energy imports. ING reports “considerable scepticism” about the Russia-Ukraine energy ceasefire that Trump also announced.
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SubscribeEven if the cargoes arrive, 300,000 tonnes is about 2.25 million barrels, which the world consumes in under an hour. Diesel shipments can ease the pressure on fuel, but they don’t address the crude supply problem.
The Gulf Still Sets the Floor
The real driver is still the Middle East. Traffic through the Strait of Hormuz hasn’t returned to normal, a disruption we covered in our Hormuz analysis. Tensions have also spread towards Bab el-Mandeb and Saudi Arabia, where Houthi forces struck Riyadh’s international airport at the weekend. Tanker attacks near Hormuz continue.
So far, though, the region’s main energy infrastructure has not been hit. Export terminals, pipelines and processing plants are intact, and that has prevented a far larger loss of physical supply. Gulf stockpiles were already running thin. An attack on a major terminal would send traders straight back into the market.
OPEC has cut its 2026 demand-growth forecast to 400,000 barrels a day, down from 1.4m at the start of the year. It also says shipping and insurance now account for more than a third of the cost of a cargo. High prices are reducing demand, but not quickly enough to bring Brent below $100.
The Call
Crude will most likely stay in its recent range, with Gulf risk limiting how far it can fall. Confirmed Russian cargoes, or a wider easing of Moscow’s export ban, would add some downward pressure, but only a modest amount unless volumes rise substantially.
The real bearish trigger would be a concrete step towards normal traffic through Hormuz, which would release the Gulf supply that is currently stuck. The upside risk is larger. Renewed escalation in the Gulf or Red Sea that damages energy infrastructure could push Brent through the top of its range within days.
For Europe, that means another winter of costly energy, with all the political strain it brings, and governments that, as the IMF warned this week, have little fiscal room left to pay for it.
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