Oil prices rose to a five-month high after Brent crude for December delivery hit $115.45 a barrel. Markets reacted to speculation that the US and Israel could resume strikes on Iran after the US midterm elections on November 3.
Donald Trump said on October 8 that Washington would not attack Iran before the election. At the same time, ABC News reported on October 22 that the US and Israeli militaries were developing plans for new strikes after the vote. It is this uncertainty that has heightened concerns about another energy supply disruption and added pressure on prices.
“Oil is at a five-month high on speculation that there could be new US and Israeli strikes after the midterm elections,“ said Danny Hewson, head of analysis at financial company AJ Bell.According to her, tensions over the war in Ukraine and the expected seasonal increase in energy demand in the Northern Hemisphere are also supporting the rise in oil and gas prices. Hewson warned that high prices keep concerns about inflation and a possible interest rate hike at the forefront.
Russian diesel heads for New York
Amid the oil surge, the first tanker under the agreement between Trump and Vladimir Putin set off with Russian diesel for the United States. The Maltese-flagged Agioi Fanendes loaded nearly 300,000 barrels of fuel at the Russian terminal Primorsk and set sail on the night of October 23.
According to maritime analytics company Kpler, the tanker was near Helsinki with a stated destination of New York. It is expected to reach the US East Coast around November 7, four days after the midterm elections. Separate shipping data estimates the cargo at about 40,000 tons of low-sulfur diesel.
The Kremlin confirmed the departure. Spokesman Dmitry Peskov said that “the first tanker has left for its recipients, for the buyers,” adding: “Further deliveries will continue at a steady pace.”
The deal was announced by Trump in early October as an attempt to increase fuel supplies and limit price pressure on American consumers. According to the president, Russia must immediately deliver 300,000 tons of diesel, then another 500,000 tons in November and 1 million tons after that.
Deal draws criticism
The agreement temporarily eased US sanctions on Russian diesel, imposed after Russia’s invasion of Ukraine in 2022. However, it was criticized by the Ukrainian government and representatives of both major parties in the United States.
Volodymyr Zelensky described the deal as “unfair” and warned that it would provide additional revenue for the Russian military campaign. Trump defended the decision by arguing that lower fuel prices were his priority, especially for farmers, ranchers and truckers.
Meanwhile, the Kremlin said that talks between Russia, Ukraine and the United States were expected to resume in November in Abu Dhabi. Moscow insists that the talks should lead to a final agreement, while Kiev continues to make a ceasefire a condition for real negotiations.
Sources: dailymail.com, afp.com, euronews.com