Oil Prices Mixed as Russia Diesel Deal and Houthi Attacks Raise Supply Concerns

Oil prices traded mixed on Tuesday as investors assessed the impact of a U.S.-Russia diesel supply agreement alongside growing concerns about Middle East oil disruptions following escalating Houthi attacks in Yemen and Saudi Arabia.

At 15:43 ET (19:43 GMT), Brent crude futures for December delivery declined 0.6% to $105.96 per barrel, while U.S. West Texas Intermediate (WTI) crude futures for November rose 0.8% to $94.51 per barrel.

Crude prices initially weakened after Russian Deputy Prime Minister Alexander Novak indicated that Moscow could increase diesel exports beyond the volumes outlined in a recent agreement with U.S. President Donald Trump.

Trump announced last Friday that Russia would supply more than 300,000 tons of diesel to global markets, followed by 500,000 tons in November and an additional 1 million tons afterward. Washington also temporarily eased sanctions on Russian fuel exports.

However, the agreement has attracted bipartisan criticism from U.S. lawmakers concerned that increased Russian energy revenues could undermine sanctions and support Moscow's war against Ukraine.

Trump also proposed an energy ceasefire between Russia and Ukraine, although Ukrainian President Volodymyr Zelenskyy accused Moscow of continuing attacks on critical infrastructure despite Kyiv suspending strikes on Russian energy facilities.

Meanwhile, escalating Middle East tensions provided support for oil prices. Iran-backed Houthi militants threatened additional attacks on Saudi airports and oil refineries if Saudi-led forces targeted Yemen's capital, Sanaa.

Deadly attacks at a Saudi airport over the weekend heightened fears of further disruptions to regional energy infrastructure and shipping routes.

Trump accused the Houthis of deliberately attempting to increase oil prices ahead of November's U.S. midterm elections. He also suggested Washington could participate in Saudi-led military operations against the group.

Analysts at ING noted that investors remained particularly concerned about Houthi attacks and potential threats to oil shipments through the Persian Gulf.

Uncertainty surrounding U.S.-Iran relations added further pressure to energy markets. Tehran reportedly rejected Washington's latest response to its peace proposal as insufficient, while reports indicated Iran was strengthening its defenses ahead of possible renewed military confrontation.

With geopolitical risks mounting and additional Russian diesel supplies potentially entering global markets, oil prices remain vulnerable to sharp fluctuations as traders monitor developments in the Middle East and Eastern Europe.