Oil rose 2% on Saudi attacks and Hormuz tanker strikes, defying Trump diesel deal

Global crude oil futures rose nearly 2% on Monday as deadly attacks on Saudi Arabia and fresh tanker strikes in the Strait of Hormuz outweighed US efforts to cool markets with Russian diesel supplies.

Crude climbed to four-week highs as escalating Middle East hostilities rapidly eclipsed bearish political headlines. Prices faced early headwinds after US President Donald Trump announced that Russia would release more than 300,000 tons of diesel and claimed Moscow and Kyiv had agreed to an energy infrastructure ceasefire. However, the retreat was short-lived as Ukraine accused Russia of immediate ceasefire violations and traders discounted the immediate volume impact on tight physical balances.

Intensifying security threats across the Gulf quickly restored bullish momentum. Houthi forces claimed a weekend missile strike on Riyadh's international airport that killed 13 people, while attacks on a Red Sea pipeline forced the temporary shutdown of five Saudi refineries. Concurrently, drone strikes damaged two commercial tankers near Sohar and within the Strait of Hormuz, prompting Goldman Sachs to lift its December Brent forecast to $90/barrel on an estimated $20 risk premium.

Downside pressure from refined products and domestic storm recoveries failed to check the advance. While ICE gasoil tumbled 2.3% to $1,449/ton on the Russian export news, upstream crude remained underpinned by physical supply anxiety. In the US, Shell, Chevron, and BP began redeploying personnel to restore shut-in Gulf of Mexico output following Hurricane Isaias's weekend landfall, though elevated European war risk pushed the transatlantic Brent–WTI spread out to $12.91 a barrel.