Oil Prices Rise After Trump Announces Russia Ukraine Energy Truce

Oil prices moved higher as global markets weighed U.S. President Donald Trump's announced energy ceasefire between Russia and Ukraine and its potential effect on supply flows. Brent and West Texas Intermediate futures rose despite doubts over whether the agreement would quickly change market conditions.

According to market data, December Brent crude futures increased 0.69% to $105.44 a barrel, while November U.S. West Texas Intermediate futures gained 0.54% to $92.35 per barrel. Both benchmarks had earlier fallen about 1.5%.

Trump said Russia and Ukraine agreed not to target each other's energy facilities, while Ukrainian President Volodymyr Zelenskyy welcomed the arrangement but said Moscow needed to follow through. Trump announced the agreement in a social media statement.

"Effective immediately, there is an ENERGY CEASEFIRE in the War between Russia and Ukraine. Both parties have agreed. Do not break it!" said Donald Trump, President of the United States.

Markets also considered the possibility of additional Russian energy supplies reaching global buyers after Trump said Russia would provide more than 4 million tons of diesel under a deal made with Russian President Vladimir Putin during a phone call.

Oil prices remained sensitive to developments in the Middle East, including diplomatic efforts involving Iran, Saudi Arabia, and Yemen's Houthis. Saudi state news agency reported Iran's Foreign Minister Abbas Araghchi discussed regional escalation and efforts to address it with Saudi Foreign Minister Faisal bin Farhan bin Abdullah.

UOB said oil market pressure could continue as Hurricane Isaias affected energy production in the U.S. Gulf Coast area.

"The pressure on oil prices could remain on the upside as Hurricane Isaias strengthened to Category 3 with 120mph winds as it approached the US Gulf Coast, forcing energy producers to curtail offshore output," said UOB.

UOB also cited heightened Middle East risks after reported Houthi missile strikes on Saudi Arabia's Riyadh airport that killed 12 people and injured more than 300.

"Separately, Houthi missile strikes on Saudi Arabia's Riyadh airport on Sat which killed 12 people and injured over 300, have materially elevated Middle East risk premia," said UOB.