Oil prices fell Monday after President Donald Trump announced an "energy ceasefire" between Russia and Ukraine, with both nations agreeing not to target each other's energy infrastructure.
Brent crude futures for December delivery dropped 1.33% to $103.33 a barrel. U.S. West Texas Intermediate futures for November declined 1.68% to $90.31 per barrel.
"Effective immediately, there is an ENERGY CEASEFIRE in the War between Russia and Ukraine. Both parties have agreed. Do not break it!" Trump said in a social media statement Sunday.
Ukrainian President Volodymyr Zelenskyy responded on social media that "Ukraine supports the ceasefire, and it is important that Russia support it as well."
The price decline reflects optimism about improved energy supplies. Trump said Friday that Russia will supply more than 4 million tons of diesel to the global market under a deal he struck with Putin during a phone call.
Separately, Iran's Minister of Foreign Affairs Abbas Araghchi called Saudi Arabia's Minister of Foreign Affairs Faisal bin Farhan bin Abdullah to discuss regional escalation and potential dialogue efforts. According to Al Jazeera, Araghchi said Iran was ready to provide assistance to help start dialogue between Saudi Arabia and Yemen's Houthis.
Near-term oil volatility remains likely. UOB analysts noted that Hurricane Isaias, which strengthened to Category 3 with 120 mph winds as it approached the U.S. Gulf Coast, forced energy producers to curtail offshore output and could pressure supplies.
Houthi missile strikes on Saudi Arabia's Riyadh airport on Saturday, which killed 12 people and injured over 300, have also elevated Middle East risk premiums, according to UOB. The U.S.-Iran conflict continues to add pressure to prices.