Oil prices fell more than 1% on Tuesday morning, 13 October, snapping a three-session winning streak against a backdrop of persistent Middle East tensions and uncertainty over the outlook for global fuel supply.

North Sea Brent crude, the European benchmark, was down 1.25% at $105.32 a barrel, having posted cumulative gains of more than 6% over the three preceding sessions.

West Texas Intermediate (WTI), the US benchmark, retreated 1.39% to $92.40 a barrel. Natural gas traded in Amsterdam, meanwhile, edged up 0.43% to €84.69 per megawatt-hour.

European diesel futures also recorded losses of more than 1%, extending the downward trend seen on Monday when prices fell as much as 8%.

The decline comes amid expectations of an increase in refined fuel supply following the announcement of an agreement between the United States and Russia to release approximately three million tonnes of diesel onto the market.

Analysts caution, however, that the measure is likely to provide only temporary relief and will not resolve the underlying supply constraints in the international market.

Price movements continue to be shaped by the war between Russia and Ukraine. Although US President Donald Trump announced a proposal for an ‘energy ceasefire’, acceptance of the terms by the parties involved has not been confirmed.

Meanwhile, attacks on energy infrastructure are continuing. Ukrainian President Volodymyr Zelensky said Ukraine would press ahead with strikes against Russian refineries if Moscow maintained its own attacks, in an effort to reduce the revenues financing the Kremlin’s war effort.

In the Middle East, an escalation in attacks attributed to the Houthis — the Iranian-backed armed group from Yemen — along with incidents involving vessels, has kept investors alert to the security of maritime shipping routes.

Despite the tensions, oil transport through the Strait of Hormuz has so far continued to function, although the risk of further disruptions persists.

“The fact that the system has found ways to keep oil flowing does not mean it can handle another serious disruption. That is the risk the market may be underestimating,” said Haris Khurshid, Chief Investment Officer at Karobaar Capital, as quoted by Bloomberg.