Oil prices dip as Russian diesel aid offsets Gulf supply worries

On Tuesday, Brent crude futures dropped by just over half a percent and U.S. West Texas Intermediate slipped by about half a percent, as investors balanced the prospect of additional Russian diesel entering the market with ongoing security threats in the Gulf. The United States briefly lifted sanctions on Russian fuel after an agreement to supply diesel globally, prompting criticism from members of both parties who argue the deal may breach existing export bans.

Analysts note that while the Russian diesel flow and steadier Saudi output provide some relief, market sentiment remains more focused on the risk of further attacks on ships and pipelines. Recent Houthi missile strikes on Riyadh's international airport and reported tanker assaults near the Strait of Hormuz have heightened fears of disruptions along a key energy corridor. OPEC and non-OPEC participants highlighted soaring shipping and insurance costs, now exceeding a third of commodity value, and revised down their oil-demand growth forecast for the year to 400,000 barrels per day.