Oil prices declined on Tuesday as markets reacted to a mix of geopolitical developments. US President Donald Trump's executive order, which waived some sanctions and tariffs on Russian energy exports, provided some relief. However, concerns about supply disruptions in the Middle East kept prices elevated. Brent crude futures dropped 49 cents, or 0.45%, to $109.06 a barrel by 0010 GMT, while US West Texas Intermediate (WTI) crude for November delivery fell 0.33% to $103.32.
The executive order, issued on Friday night, lifted key sanctions and tariffs related to Russian oil and gas. However, Trump indicated that a final decision was still pending, and Secretary of State Marco Rubio suggested officials needed more time to assess the situation. Despite a recent increase in Russia's crude oil production, output remained significantly lower than a year ago, according to the International Energy Agency.
Tensions in the Gulf region also weighed on market sentiment. Yemen's Iran-aligned Houthis claimed responsibility for attacks on Saudi energy, airport, and military targets, including an Aramco site in Yanbu and the Shaybah oilfield. While Saudi authorities did not confirm the claims, the attacks heightened fears about regional stability and potential supply disruptions. Meanwhile, a deadly attack on a government training camp in Yemen's Shabwa province underscored the ongoing risks to energy supply from the region.
In the US, crude oil stockpiles were expected to have fallen last week, along with product inventories, according to a preliminary Reuters poll. Analysts noted that while the prospect of additional Russian diesel supply offered some relief, traders remained focused on the risks to energy infrastructure in the Gulf region.