Oil gains on Middle East tensions, growing doubts of 'energy ceasefire' between Russia and Ukraine

Oil prices rose on Monday amid growing doubts over a Russia-Ukraine "energy ceasefire" announced by President Trump over the weekend.

Meanwhile, Middle East tensions expanded after Saudi Arabia said it had suffered its deadliest attack since the outbreak of the US-Iran war, adding to worries over further supply disruptions.

Brent crude ( BZ=F ) rose to $106 per barrel, while West Texas Intermediate crude ( CL=F ) dropped to $93 a barrel.

Ukraine President Volodymyr Zelensky on Monday said strikes against Russia would continue if Moscow doesn't agree to the energy truce. Trump had said earlier that both sides had agreed not to hit either side's energy infrastructure.

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

The announcement initially raised hopes of improved global energy supplies.

Higher energy costs are adding to expectations that the Federal Reserve will maintain its tightening stance to curb inflation. The market fully priced in a 25 basis point Federal Reserve rate increase in December.

On Friday, President Trump announced that Russian President Vladimir Putin has agreed to release diesel supplies to the US and the global market.

The administration has been looking for ways to ease high energy costs ahead of November's midterm elections.

However, continued tensions in the Middle East, along with recent shut-ins near the Gulf Coast due to Hurricane Isaias, could remain volatile in the coming days.

Ines Ferre is a senior business reporter for Yahoo Finance.