The Commodities Feed: Oil steadies as Middle East tensions linger
Per the full note from ING's commodities desk, oil has steadied this morning after a 3.4% single-session drop, with Middle East tensions and a sharply reduced Libyan supply picture keeping a geopolitical risk premium embedded in crude. The supporting evidence is concrete: Libya's Sharara field has fallen to roughly 127k bbl/d from around 340k bbl/d after an armed group blocked the pipeline to Zawiya, and Russia may extend its ban on most diesel exports as Ukrainian strikes constrain refinery runs — a combination that has tightened refined product availability and supported gasoil and gasoline cracks in Western markets. ING authors Ewa Manthey and Warren Patterson also flag that the US is intensifying pressure on Iran, warning it will shut down Iranian airlines from Wednesday and sanctioning foreign firms dealing with Iranian carriers. The counterweight is diplomatic: markets are weighing hopes for constructive discussions at this week's UN General Assembly, which is precisely why crude gave back ground yesterday before stabilizing. This is a commodity-supply story with no direct G10 FX expression in our coverage universe, so there is no consensus currency target to anchor against; traders should treat it as a cross-asset input rather than a standalone FX trade.
What the desk is arguing
The desk frames crude as stabilizing rather than resolving — a market caught between a genuinely tight physical supply backdrop and the possibility that UN General Assembly diplomacy drains the geopolitical premium. ING's Manthey and Patterson are explicit that persistent Middle East tensions "continued to support risk premiums," which is a statement about the floor under oil, not a bullish call on the next leg.
The evidence the desk leans on is supply-side and specific: Libya's Sharara output down to roughly 127k bbl/d from about 340k bbl/d after an armed group blocked the pipeline to the Zawiya export terminal, plus a possible extension of Russia's ban on most diesel exports as refinery runs stay constrained by repeated Ukrainian attacks on energy infrastructure. The US escalation against Iran — a warning that Iranian airlines will be shut down from Wednesday and additional sanctions on foreign firms doing business with Iranian carriers — adds a further layer of supply-risk pricing. ING ties the diesel restriction directly to tighter refined product availability and firmer gasoil and gasoline cracks in Western markets.
The alternative read the desk is implicitly rejecting is that yesterday's 3.4% settle lower marked the start of a genuine de-risking. ING notes that US and EU efforts to discourage attacks on energy infrastructure have "yet to yield a breakthrough," which is the desk's way of saying the diplomatic channel is not yet credible enough to justify pricing out the premium.
How other firms see it
With no per-firm currency targets attached to this commentary, the relevant read-across is cross-asset rather than cross-desk: the crude risk premium intersects the broad dollar complex through the inflation and terms-of-trade channel, and it intersects energy-importing currencies through the current account.
Watch the EUR/USD trajectory and the broader dollar index as the transmission channel for any sustained move in crude, and watch USD/JPY given Japan's energy import dependence and the sensitivity of the BoJ normalization path to imported inflation. Gasoil and gasoline crack spreads are the cleanest high-frequency tell on whether the Russian diesel restriction is actually binding in Western markets.
What the calendar says
The near-term catalyst is this week's UN General Assembly, which ING explicitly identifies as the diplomatic event markets are trading against — constructive signals there would be the first credible mechanism for draining the geopolitical premium.
The second date to mark is Wednesday, when the US warning to shut down Iranian airlines takes effect. That is a hard deadline, not a negotiation, and any escalation around it is the most likely trigger for the next leg higher in crude and a renewed bid for the dollar as a safe haven.
Key takeaways
- 01ING's commodities desk reads crude as stabilizing, not resolving — Middle East tensions and Libyan supply losses are keeping a geopolitical risk premium embedded after yesterday's 3.4% drop.
- 02Libya's Sharara field is running at roughly 127k bbl/d versus about 340k bbl/d normally, after an armed group blocked the pipeline to the Zawiya export terminal.
- 03Russia may extend its ban on most diesel exports as Ukrainian strikes constrain refinery runs, which ING links directly to tighter refined product availability and firmer gasoil and gasoline cracks in Western markets.
- 04The US is escalating against Iran, with a Wednesday deadline to shut down Iranian airlines and fresh sanctions on foreign firms dealing with Iranian carriers.
- 05This is a commodity-supply narrative with no direct G10 FX expression in our coverage universe — treat it as a cross-asset input, not a standalone currency trade.
Market implications
Watch the Wednesday deadline on Iranian airlines and the tone out of the UN General Assembly — those are the two binary inputs on the geopolitical premium. If the diesel export ban is extended, gasoil and gasoline crack spreads are the cleanest confirmation that the refined-product tightness ING describes is actually binding in Western markets. For FX, the transmission runs through the dollar's safe-haven bid and the terms-of-trade drag on energy importers, with USD/JPY the most leveraged G10 expression.
Risks to this view
The call is invalidated if the UN General Assembly produces a credible de-escalation mechanism — that would drain the geopolitical premium and likely send crude back toward yesterday's lows, pulling the safe-haven dollar bid with it. Similarly, a formal extension of the Russian diesel export ban being priced in and then reversed, or a restart of the Sharara pipeline to Zawiya, would remove the two most concrete supply supports ING cites. Any of these would force a reassessment of the risk-premium framing within days, not weeks.
Articles The Commodities Feed: Oil steadies as Middle East tensions linger Published 07:37 Commodities daily Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download Crude oil prices recovered this morning, clawing back some of yesterday’s losses as persistent Middle East tensions continued to support risk premiums Ewa Manthey and Warren Patterson Energy - Russia looking to extend diesel export ban again Crude oil prices edged higher this morning after settling 3.4% lower yesterday, as markets weighed hopes for constructive discussions at this week's UN General Assembly against ongoing Middle East supply risks. The US has also intensified pressure on Iran, warning it will shut down Iranian airlines from Wednesday and imposing additional sanctions on foreign firms doing business with Iranian carriers. Supply-side risks remain elevated.
Libya's Sharara oilfield has seen output fall to around 127k bbl/d, down from roughly 340k bbl/d, after an armed group blocked the pipeline linking the field to the Zawiya export terminal. Meanwhile, Russia may extend its ban on most diesel exports as refinery runs remain constrained by repeated Ukrainian attacks on energy infrastructure, Bloomberg reported . Continued restrictions on Russian diesel exports have tightened refined product availability and supported gasoil and gasoline cracks in Western markets.
Efforts by the US and EU to discourage attacks on energy infrastructure have yet to yield a breakthrough. Metals - Copper nears record high LME copper extended gains, moving closer to the record highs reached earlier this month. Improved risk sentiment, supported by stronger equity markets and lower oil prices, boosted appetite for cyclical assets, while signs of tightening supply in China provided additional support.
Planned maintenance at several Chinese smelters in October and November is expected to curb refined output, while persistent congestion at Shanghai ports continues to constrain imports, reinforcing expectations of a tighter market. Latest IAI data showed global primary aluminium production fell 1.7% year-on-year to 6.2mt in August, with output down 0.9% year-on-year to 48.6mt over the first eight months of the year. Chinese production remained resilient, rising 2.9% YoY to 3.9mt in August, while output in Europe (including Russia) increased 7.2% YoY and Asia ex-China grew 2.4%.
In contrast, production weakened across most other regions, with Gulf output falling 42.6% YoY amid ongoing disruptions linked to the Iran conflict and African production declining 33% YoY. Agriculture - US corn and soybean conditions steady The latest USDA crop progress report showed US crop conditions remain below year-ago levels. Corn rated good-to-excellent fell to 57%, down from 66% a year ago, while soybean conditions held at 58%, compared with 61% last year.
Harvest progress remains ahead of historical norms, with 13% of the corn crop and 12% of soybeans harvested, both above their respective five-year averages. Meanwhile, winter wheat plantings reached 17%, lagging both last year's pace and the five-year average. Ukraine's Agriculture Ministry reported grain and legume exports for the 2026/27 season at 4.7mt as of 21 September, down 22% year-on-year.
Corn exports nearly doubled to 1.84mt, while wheat shipments fell 44% to 2.3mt. The decline in overall exports reflects ongoing disruption to Black Sea trade flows amid continued Russian and Ukrainian attacks, which have added uncertainty to regional shipping and logistics. Commodities Feed Content Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives.
The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download Authors Ewa Manthey Commodities Strategist Ewa Manthey is a Commodities Strategist based in London. She joined the bank in September 2022 and covers the entire commodities complex, with a particular focus on the metals markets.
She has… Warren Patterson Head of Commodities Strategy Warren Patterson is Head of Commodities strategy based in Singapore. He joined the bank in April 2016 and covers the entire commodities complex. Previously, he worked at a commodities trade house… In this article Energy - Russia looking to extend diesel export ban again Metals - Copper nears record high Agriculture - US corn and soybean conditions steady
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