Oil Slumps, Equities Gain After Trump Announces Russia-Ukraine Energy Ceasefire

Crude benchmarks fell more than 1% on Monday after U.S. President Donald Trump declared an immediate “energy ceasefire” between Russia and Ukraine, a statement that caught Kyiv off guard even as it reported fresh Russian strikes on Ukrainian power infrastructure.

“Effective immediately, there is an ENERGY CEASEFIRE in the War between Russia and Ukraine,” Trump posted on Truth Social early Sunday. “Both parties have agreed. Do not break it!”

The announcement followed Trump’s call for Ukrainian President Volodymyr Zelenskyy to halt attacks on Russian refineries and his suggestion that Ukraine needs new leadership to end the war. Zelenskyy responded with apparent surprise, saying he was seeking clarification but reiterated Ukraine’s support for a ceasefire provided Moscow reciprocates. The Kremlin has not yet confirmed its agreement.

While Western allies welcomed the prospect of de-escalation, Trump faced criticism for a concurrent decision to temporarily ease U.S. sanctions on Russian diesel exports, a move European leaders and Kyiv warned would embolden President Vladimir Putin.

The price decline reversed an earlier spike triggered by Houthi attacks on Saudi Arabia over the weekend. At least a dozen people were killed at Riyadh’s international airport on Saturday — the deadliest assault on Saudi soil in over a decade — followed by a second strike on Sunday. The Iran-backed group claimed responsibility for multiple operations and vowed to continue targeting the kingdom’s transit hubs.

“The market is no longer paying a full geopolitical premium on every headline, and that is probably the most useful signal in the morning price action,” wrote Stephen Innes of SPI Asset Management. “A strike matters if it threatens real barrels, shipping lanes, refining capacity or insurance costs; otherwise, the market is getting increasingly reluctant to pay up simply because the geopolitical ticker flashes red. The physical market remains tight enough to keep Brent above $100, but futures are refusing to treat every new escalation as the start of another straight-line inflation shock.”

Markets Overview Early Monday

Lower oil prices lifted most Asian benchmarks, with Hong Kong, Sydney, Singapore, Wellington, and Manila advancing. Seoul and Taipei lagged as chipmakers SK hynix, Samsung, and TSMC declined, while Tokyo was closed for a holiday. U.S. equity futures pointed to a sharply higher open.

Investors are also bracing for key U.S. inflation and retail sales data due this week, which could influence the Federal Reserve’s interest-rate decision at its late-October meeting. Third-quarter earnings season kicks off with reports from JPMorgan Chase, Goldman Sachs, and Bank of America, while technology giants will follow later in the month, offering insight into the outlook for the AI sector after years of massive capital investment.

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