Oil prices moved lower on Monday after U.S. President Donald Trump signed an executive order waiving key sanctions and tariffs on Russia that had been scheduled to take effect this week. Brent crude futures fell 1.21% to $108.52 a barrel, while West Texas Intermediate crude slipped 0.13% to $101.30. The pullback came after a strong run last week, when Brent touched a five-month high and WTI settled at its highest level since September.
Secretary of State Marco Rubio said the administration would take up to 60 days to assess the potential impact of the restrictions on the American and global economies. The move follows an earlier decision by Washington to waive sanctions on Russian diesel exports through April 2027. The measures are intended to improve refined fuel availability and ease energy price pressures ahead of the November 3 midterm elections, where high diesel prices have become a major political concern.
However, the supply outlook remains clouded. Data from analytics firm Kpler showed that average crude flows through the Gulf fell to approximately 8.5 million barrels per day last week, measured on a seven-day rolling basis, from more than 20 million barrels per day in the preceding week. Kpler recorded 10 attack incidents during the week, underscoring severe disruption to commercial shipping. Iran has intensified attacks on tankers in nearby waters, while the Saudi Arabia-Yemen conflict continues to threaten regional energy infrastructure.
In Russia, Ukrainian drone attacks set an oil terminal and depot in St. Petersburg on fire; the terminal handles exports of about 120,000 barrels per day of refined petroleum products, according to Kpler. DBS expects oil prices to remain in the $100 to $110 range as the U.S. approaches the midterm elections. Suvro Sarkar, head of energy research at DBS, told Reuters that the administration's measures were unlikely to resolve underlying supply constraints, offering only temporary relief with limited structural impact on supply.
Key takeaway: Brent retreated over 2% from five-month highs after Trump waived new Russia sanctions, but Hormuz shipping disruptions continue to threaten global oil supplies and keep Brent above $107.
