WTI Oil extends its pullback to $91.00 amid US imports of Russian Diesel

Crude Oil trades lower on Tuesday, as investors ponder the impact of the US President, Donald Trump’s decision to lift the ban on Russian diesel imports. The US benchmark West Texas Intermediate (WTI) barrel has retreated to session lows at $91.05 during the European Trading session, about $2.5 below the two-week high, at the $93.50 area, hit on Monday.

Markets' expectations of a significant increase in diesel supplies from Russia entering global markets will push prices lower and offset the upside pressures stemming from the escalating Middle East conflict.

Doubts about the real impact of Russian diesel imports

Trump affirmed on Truth Social on Monday that the decision to ease restrictions on Russian diesel imports for six months “is the right choice for the American people”. A report by Goldman Sachs, however, casts doubt on the overall impact on oil prices from that decision, as it said the 6 million barrels per day expected to be delivered by Russia will only lower the price of the barrel by between $1 and $2,

Elsewhere, tensions in the Middle East are far from easing, which pressures Crude prices higher. The Saudi Arabian Security Minister, Prince Abdul Aziz bin Salman, called for a serious response to last weekend’s deadly attacks on Saudi Airports by Houthi militias, which threatens to escalate the US-Israel war in Iran into a regional conflict.

Analysts at ING point out that physical supply risks are not confined to geopolitical flashpoints, noting that “hurricane activity in the Gulf of Mexico continues to disrupt offshore operations for US producers.” They highlight that companies “have shut in almost 605k b/d of oil production, which is equivalent to nearly 30% of total US production in the Gulf of Mexico, according to the Marine Minerals Administration,” adding another layer of constraint to the near-term supply picture.