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19.10.2026 09:00 AM
U.S.–Russia Diesel Deal and Sanctions: What's Capping Oil Below $108

Today oil eased off a five-month high as traders weighed signs of resilient Middle East flows against a renewed flare-up of fighting in the region. Brent traded near $108/barrel after jumping almost 4% on Friday, while WTI slipped toward $100.

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News from the region remains worrying. A Saudi helicopter crashed near the Yemen border, the Houthis have targeted Yanbu — one of Saudi Arabia's key export ports — and UK maritime operators reported two tankers hit in the Persian Gulf. These reminders keep the risk to maritime logistics front and center for the market.

At the same time, physical flows appear to be holding up. U.S. Energy Secretary Chris Wright said oil shipments from the Persian Gulf have recovered to roughly 80% of pre-war levels, although product flows remain constrained. He also said he is negotiating with European allies to release diesel reserves. That matters because refined products have risen more than crude, feeding inflation and weighing on the global economy.

Recall Brent is up more than 75% year-to-date as fighting in the Middle East and the Russia-Ukraine situation have tightened supply.

A separate story involves Russia. Donald Trump recently said the U.S. struck a larger diesel-supply deal with Moscow and removed tariffs and sanctions on some Russian energy — a move Congress is attempting to block with legislation. The Wall Street Journal reports Vladimir Putin has proposed talks with Trump and China's Xi Jinping next month on Ukraine; Trump has not agreed to such a meeting so far.

All this leaves oil caught between geopolitical risk and recovering shipments, so I do not expect a durable push above current levels yet. I lean to Brent trading in roughly the $100–108 range in coming days, with fresh strikes on Gulf or Red Sea infrastructure able to snap prices back to recent highs quickly. If flows continue to recover and diplomatic progress on Ukraine advances, pressure on crude and products could lift, sending prices toward the bottom of the range.

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Buyers need to clear the near resistance at $101 to target $104, above which a breakout will be difficult. The farther upside target is $107. On the downside, bears will try to seize $98; if they succeed, a range breakdown would damage bull positions and push oil to $95, with a prospect of extending to $92.

Miroslaw Bawulski,
Analytical expert of InstaForex
© 2007-2026
EUR
Summary
Neutral
Urgency
1 day
Analytic
Maxim Magdalinin
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