Oil Declines Despite Houthi Attacks in Saudi Arabia — Update

By Ronnie Harui and Sherry Qin

Oil prices declined in Asia on Monday despite Houthi attacks on Saudi Arabia's international airport over the weekend, thanks to hopes that Russian diesel exports could help ease global fuel shortages.

President Trump said Friday his administration had reached an agreement for Russia to supply hundreds of thousands of tons of diesel fuel. Trump said in a post on Truth Social that Russian President Vladimir Putin agreed to supply over 300,000 tons of diesel fuel to the U.S. and global markets, another 500,000 tons in November, and one million tons "immediately thereafter."

"This would mark a partial lifting of Russia's ban on diesel exports," Vivek Dhar, an analyst at Commonwealth Bank of Australia, said in a report. "If these exports do eventuate, it will provide some relief to a market that is facing diesel shortages, but much will likely depend on Ukraine's ongoing attacks on Russian oil infrastructure," the analyst added.

Front-month West Texas Intermediate crude oil futures fell 1.6% to $90.37 a barrel, while front-month Brent crude oil futures declined 1.2% to $103.43 a barrel, according to ICE data.

However, the downward pressure on oil prices could be tempered by rising tensions in the Middle East. Yemen's Iran-backed Houthi militants conducted a missile attack on Saudi Arabia's international airport that killed at least 12 people and injured hundreds more on Saturday. The kingdom's military vowed a response, while President Trump told reporters that the U.S. could join Saudi strikes on the Houthis in light of the airport attack.

The increasing tensions between the Houthis and Saudi Arabia also threaten oil supply flows in the Red Sea and add pressure on freight costs.

"From a sentiment perspective, developments in the Middle East and between Russia and Ukraine will be key drivers to start the week with two-sided risk on energy prices," said Skye Masters, head of Markets Research at National Australia Bank, in commentary.

Equity markets across Asia-Pacific were mixed. South Korea's Kospi fell 2.7% and China's Shanghai Composite Index was down 0.1%. Hong Kong's Hang Seng index edged 0.2% higher. Japan's financial markets were closed for a public holiday.

Asian semiconductor stocks were broadly weaker ahead of the upcoming earnings season. South Korea's memory giants Samsung Electronics and SK Hynix fell 3.6% and 2.5%, respectively. Taiwan Semiconductor Manufacturing Co. edged 0.2% lower and China's CXMT was down 3.6%.

Artificial intelligence-related stocks' resilience will be under a microscope. In Asia, this week's focus will be on Taiwan Semiconductor Manufacturing Co.'s results on Thursday.

"Its commentary on AI accelerator demand, advanced packaging capacity, manufacturing utilisation and future investment plans will be scrutinised for clues about the sustainability of the AI hardware investment cycle," Pepperstone head of research Chris Weston said in a note.

In currency markets, the Indian rupee strengthened sharply against the dollar after the country's central bank announced measures aimed at bolstering the local currency, which had been hovering near record lows.

The dollar was recently 1.1% lower at 95.7275 rupees after earlier touching 95.5875 rupees, its lowest intraday level since Sept. 23, LSEG data showed.

Write to Ronnie Harui at ronnie.harui@wsj.com

(END) Dow Jones Newswires

October 12, 2026 02:01 ET (06:01 GMT)