Oil Prices Retreat as US-Russia Diesel Pact Shifts Market Sentiment

Brent crude settled at $107.84 per barrel, while West Texas Intermediate hovered at $100.29. Despite the recent dip, current benchmarks remain significantly higher than last week’s figures of $105.61 and $93.37 respectively. The shift follows an executive order reversing sanctions established under the recent Lindsay O. Graham Act, clearing the path for an immediate 2.3 million-barrel injection of Russian diesel into the U.S. market, with another 7.6 million barrels scheduled for delivery through November.

While the market reacted to the news, industry experts suggest these volumes are insufficient to fundamentally rebalance global supply. Price volatility persists, fueled by lingering doubts over the durability of the sanction exemptions and ongoing security threats in the Strait of Hormuz. Data from Kpler reveals a sharp decline in tanker traffic, with the seven-day moving average through the waterway dropping to 8.5 million barrels per day—a steep fall from the 20 million barrels recorded just one week ago.