# Oil falls to about $103 after Trump declares a Russia-Ukraine "energy ceasefire" that covers only refineries

Brent dropped 1.3% in early Asian trading, but Russia struck Ukrainian power plants in Kharkiv and Kyiv within hours of Trump's announcement, and continued Houthi attacks on Saudi Arabia kept crude above $100, as neither Moscow nor Kyiv has formally confirmed the truce.

- Published: 2026-10-12T05:11:07.327Z
- Canonical: https://polylog.news/2026-10-12/oil-falls-to-about-103-after-trump-declares-a-russia-ukraine
- Publisher: Polylog (Global desk)
- Section: markets
- Sources: [Euronews](https://www.euronews.com/2026/10/12/stocks-rise-as-oil-prices-tumble-after-trump-hails-energy-ceasefire), [OilPrice](https://oilprice.com/Latest-Energy-News/World-News/Trumps-Russia-Ukraine-Energy-Ceasefire-May-Only-Cover-Oil-Refineries.html), [The Nation Thailand](https://www.nationthailand.com/news/world/40072133), [OilPrice (Strategic Petroleum Reserve)](https://oilprice.com/Energy/Crude-Oil/How-Low-Can-the-Strategic-Petroleum-Reserve-Actually-Go.html)

Brent crude futures fell $1.37, or 1.31%, to $103.35 a barrel by 00:37 GMT on Monday, [according to Reuters](https://finance.yahoo.com/energy/articles/oil-climbs-mideast-conflict-tanker-232559304.html). The drop followed President Donald Trump's announcement that Russia and Ukraine had agreed to stop attacking each other's energy facilities. Most Asian stock markets [rose in early trading](https://www.euronews.com/2026/10/12/stocks-rise-as-oil-prices-tumble-after-trump-hails-energy-ceasefire), and the lower oil price outweighed a new wave of Houthi attacks on Saudi Arabia. Brent held near $103 a barrel through the day, [according to market data](https://hdfcsky.com/news/brent-crude-oil-price-today-october-12-2026-brent-falls-1-5percent-to-103-wti-drops-1-8percent-to-90-2-middle-east-risks-persist), as traders weighed the ceasefire against continued fighting.

The truce is narrower than Trump's post suggested. A White House official [told Axios](https://oilprice.com/Latest-Energy-News/World-News/Trumps-Russia-Ukraine-Energy-Ceasefire-May-Only-Cover-Oil-Refineries.html) that the proposal covers only attacks on oil refineries, and neither government has officially confirmed it. Trump wrote that the ceasefire takes effect "from this moment" and that "both sides have agreed." Ukrainian President Volodymyr Zelensky [told Axios](https://www.eurointegration.com.ua/rus/news/2026/10/11/7247426/) that he first heard of the announcement from the news, but that Kyiv would welcome a truce if both sides honor it.

Within hours, Russian forces struck a power plant in Kharkiv and a power station in Kyiv, Ukrainian officials said. The strike on Kharkiv's CHP-5 combined heat and power plant and a drone attack on a Kyiv power station caused outages in several districts, [the Kyiv Independent reported](https://kyivindependent.com/russia-struck-kharkivs-power-plant-shortly-after-trump-announced-energy-ceasefire/), and Russian forces also hit gas production facilities belonging to the state company Naftogaz in the Kharkiv region. Ukrainian drone attacks appeared to spare Russian oil refineries overnight, [according to the Moscow Times](https://themoscowtimes.com/2026/10/12/ukrainian-refinery-strikes-pause-after-trump-ceasefire-announcement-2-a93944), suggesting Kyiv held back while Moscow did not. Kremlin spokesman Dmitry Peskov said only that "contacts are ongoing" and that Moscow would comment when it had something to say, offering no formal confirmation of the deal.

Continued fighting in the Middle East kept oil prices from falling further. The Nation, a newspaper in Bangkok, [reported Brent at $105.48](https://www.nationthailand.com/news/world/40072133) earlier on Monday as tanker attacks and the wider regional conflict continued. Reuters reported separately that the conflict has kept Brent [above $100 a barrel](https://finance.yahoo.com/energy/articles/oil-climbs-mideast-conflict-tanker-232559304.html).

Washington has few physical supplies left to release. The US Strategic Petroleum Reserve held 283 million barrels at the end of September, [the lowest level since October 1982](https://oilprice.com/Energy/Crude-Oil/How-Low-Can-the-Strategic-Petroleum-Reserve-Actually-Go.html), according to Reuters data cited by OilPrice. With little left to sell from storage before the midterm elections, the administration is using diplomacy and sanctions licenses to lower fuel prices. Announcements of this kind can lower prices, but they do not add barrels.

Earlier truces of this kind did not last. After Trump announced an energy truce in mid-September, Russia and Ukraine struck each other's energy sites within 24 hours, [Chinese financial portal East Money reported](https://wap.eastmoney.com/a/202609163875366035.html). Ukraine hit a refinery in Russia's Samara region, and Russia struck fuel stations in Kyiv and port warehouses in Odesa. In January, the Kremlin [shortened a week-long truce that Trump had announced](https://novayagazeta.eu/articles/2026/01/29/tramp-zaiavil-chto-putin-po-ego-prosbe-soglasilsia-ne-atakovat-energoobekty-ukrainy-news) so that it ended on February 1.

## What this means

Ukraine's refinery strikes have mainly cut Russia's exports of refined fuel, especially diesel, rather than its crude exports. A refinery-only truce would therefore lower diesel prices and refining margins more than it would lower crude prices. European and Asian refiners that have been earning wide margins would lose from that shift, while the Russian budget would gain. The Gulf conflict remains the dominant driver of the crude risk premium. The war in Ukraine affects diesel and refined-fuel supply more than it affects crude oil itself. Monday's price drop priced in a broader and firmer truce than the one the White House itself describes, and the two earlier truces both broke down within days or weeks. The more likely outcome is that Brent stays above $100 over the next several weeks because Houthi attacks on Saudi Arabia continue, while diesel prices fall more than crude only if refinery strikes actually stop. That forecast depends on the Gulf conflict not easing. It would be proven wrong if a de-escalation in the Gulf pushes Brent below $100 even as reports of strikes on Russian refineries continue.

## What to watch

- Whether Ukrainian drones strike any Russian refinery this week. A strike would show that the truce exists only in Washington's announcements, and diesel prices would likely rise again.
- A formal statement from the Kremlin or from Kyiv that confirms the terms. So far, only the US side has described the deal.
- Whether Houthi targets move from Saudi airports to Saudi oil facilities. That would shift the crude premium from the Black Sea to the Gulf, where it has a larger effect on prices.