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The two main crude contracts, Brent and US WTI, fell more than 1% following the US president’s statement, although it sparked astonishment in kyiv, which also said Moscow had hit several power plants in the country.
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“Effective immediately, there is an ENERGY CEASEFIRE in the war between Russia and Ukraine,” Trump said Sunday morning on Truth Social. “Both sides agree. Don’t break it!”
His message comes after he called on Ukrainian President Volodymyr Zelensky to stop attacks on Russian refineries and said it was “time for Ukraine to find a new president” who would finally end the war.
Zelensky appeared to express surprise at the announcement, saying he was seeking more details, but added that “Ukraine supports the ceasefire, and it is important that Russia supports it as well.”
Russia has not yet confirmed its agreement.
While the announcement was welcomed by Ukraine’s allies, Trump faced criticism after announcing a temporary easing of U.S. sanctions on Russian diesel, which European leaders and kyiv said would only embolden Russian President Vladimir Putin.
The fall in oil prices reversed an initial rise that occurred in response to Houthi attacks on Saudi Arabia over the weekend.
At least a dozen people were killed at Riyadh International Airport on Saturday – the deadliest attack on Saudi soil in more than a decade – and another died following a second strike on Sunday.
These assaults mark a sharp escalation in the war in Yemen, where Riyadh has long militarily supported the internationally recognized government against the Houthis.
The Iran-backed group on Sunday claimed multiple attacks over the past 24 hours and threatened to continue targeting the kingdom’s transit hubs, calling them a “theater of operations for our forces.”
“The market is no longer paying the full geopolitical premium on every headline, and this is probably the most useful signal in morning price action,” wrote Stephen Innes of SPI Asset Management.
“A strike is significant if it threatens actual barrels, shipping lanes, refining capacity or insurance costs; otherwise, the market becomes increasingly reluctant to pay simply because the geopolitical symbol flashes red.
“The physical market remains tight enough to keep Brent above $100, but futures refuse to view any further escalation as the start of another linear inflation shock.”
Early Monday Market Preview
Lower oil prices supported most Asian markets, with Hong Kong, Sydney, Singapore, Wellington and Manila all rising.
But Seoul and Taipei were hurt by losses at chipmakers SK Hynix, Samsung and TSMC. Tokyo was closed for a public holiday.
US futures were up sharply.
Investors are also bracing for the release of key U.S. inflation and retail sales data, which could play an important role in the Federal Reserve’s decision-making on interest rates. The bank is due to meet at the end of October.
The start of earnings season this week is also in sight, with the release of results from banking giants JP Morgan, Goldman Sachs and Bank of America.
Tech giants will follow later in the month and into November, with traders keen to get a sense of the AI sector’s prospects in light of the huge amounts of money pumped into the sector in recent years.
Elsewhere, the dollar index stabilized at 102.16 as the escalating conflict in the Middle East kept investors cautious, while the euro held steady near $1.121 after five consecutive weekly declines due to French budget concerns. The yen, for its part, remained at 158.24 per dollar, with Japanese intervention likely to deter speculators.
Also on Monday, spot gold rose 0.1% to $4,198 an ounce, supported by a weaker dollar and lower oil prices that eased inflation and rate concerns, while silver gained 0.4% to $61.02 an ounce.
Additional sources •AP/AFP
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