US crude oil faces downward pressure following President Trump's announcement of a diesel supply agreement with Russia. West Texas Intermediate (WTI) crude briefly dropped toward the $90 mark after the announcement but recovered part of its losses, leaving the market at a key support level.
Under the deal, Russia will immediately supply more than 300,000 metric tons of diesel, with 500,000 tons scheduled for November and additional shipments planned beyond that. The US authorized Russian diesel imports under a temporary license extending through April 7, 2027.
Market Reaction to Diesel Announcement
The announcement put immediate pressure on refined fuel markets. US diesel futures fell nearly 5%, while the diesel crack spread against WTI crude declined by $6.45 per barrel. Despite the initial weakness, WTI crude settled Friday at $91.85 per barrel, up 0.39%, while Brent crude closed at $104.72, gaining 0.42%.
Uncertain Crude Impact
The direct impact on crude oil production remains unclear. Diesel is a refined product, and additional shipments do not automatically increase crude output. However, lower diesel prices could squeeze refinery margins and reduce refiners' willingness to pay higher prices for crude oil.
Price Levels and Technical Outlook
WTI crude is currently trading near $91.67, with the $88–$90 zone acting as immediate support. A sustained break below $90 would put buyers under pressure. If WTI falls below $88, the next downside target is $83–$85, with the $75–$78 region coming into focus if selling continues. On the upside, holding above $90 could open a recovery toward $95–$100.
The Relative Strength Index (RSI) near 50 signals neutral momentum with no decisive bullish or bearish confirmation yet.
Broader Supply Concerns
Developments involving Iran and the Strait of Hormuz remain important for crude oil prices, as disruptions to regional shipping could affect global energy supplies. Any escalation in those areas could offset downward pressure from the Russian diesel arrangement.
