Oil markets experienced mixed trading activity, with Brent crude declining slightly while WTI crude gained significantly. Standard Chartered commodity analysts expect crude prices to remain elevated despite market volatility, with upside risks persisting through the approaching midterm elections scheduled for November 3.
President Trump announced that Russia would supply over 300,000 tonnes of diesel to U.S. and international markets immediately, with commitments rising to 500,000 tons in November and eventually reaching millions of tons subject to Russian refinery capacity. However, Standard Chartered remains skeptical about Russia’s ability to fulfill these projections. Ukrainian military strikes have substantially reduced Russia’s refining infrastructure, while domestic fuel shortages and export restrictions already constrain international supply. The analysis firm notes that even a sustained ceasefire would require considerable time to repair damaged facilities and restore normal operations.
Beyond capacity constraints, Russia faces competing pressures balancing new export commitments against domestic fuel requirements. Specialized equipment sanctions further complicate infrastructure restoration efforts. Critically, Standard Chartered emphasizes that diverted volumes would simply redirect existing supply rather than create net incremental global availability. Additionally, transportation costs have surged dramatically, with shipping and insurance now exceeding one-third of commodity value on disrupted routes, preventing normalized market conditions even as volumes recover.
Middle East tensions continue supporting crude prices, with Yemen’s Houthi forces conducting missile attacks on Saudi infrastructure including King Khalid International Airport and Dammam airport, with another strike intercepted near Riyadh on October 12. These incidents underscore the region’s infrastructure vulnerability and potential for further escalation affecting supply recovery prospects.
European natural gas prices remain elevated as cooler weather increases heating demand during the storage injection season. Week-on-week LNG demand surged 26 percent while storage injections rose 8 percent simultaneously, tightening the regional balance. Despite increased Norwegian Continental Shelf flows and LNG deliveries, TTF gas prices jumped 10.2 percent to €85.83 per MWh.
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