Oil prices fall after Trump waives Russia sanctions, with Middle East supply risks still high
Brent and US crude fell by about 2% on Monday after a US waiver of Russia-related sanctions. Disruption around the Strait of Hormuz remains a concern for traders.
Oil prices fell by about 2% on Monday, October 19, after US President Donald Trump waived Russia-related sanctions and tariffs on Friday. The move raised the prospect of more Russian fuel reaching world markets, while attacks on tankers near the Strait of Hormuz continued to threaten supplies, Reuters reported.
At 0619 GMT, Brent crude futures were down $2.29, or 2.08%, at $107.57 a barrel, according to Reuters. US West Texas Intermediate futures fell $1.95, or 1.92%, to $99.46 at the same point in trading.
The decline followed recent highs: Reuters said Brent had settled on Friday at its highest level since May 19, while US crude had closed at its highest since September 17. Fortune, carrying Associated Press reporting, also reported an early Monday drop of about 2% in oil prices after Trump’s decision.
How the Russia sanctions waiver affects oil
Trump signed an executive order on Friday waiving key sanctions and tariffs under the Graham Act, Reuters reported. He had signed the law the previous month after lawmakers urged him to increase pressure on Moscow over its war in Ukraine. The waiver’s effect on the wider economy remains uncertain.
US Secretary of State Marco Rubio said Trump would take up to 60 days to assess the economic effects of the waivers, according to Reuters. KCM Trade analyst Tim Waterer said easing the measures could lead to higher Russian fuel exports. The size of any resulting increase has yet to be established.
Phillip Nova’s head of market insight, Priyanka Sachdeva, assessed the decision as an attempt to control oil prices ahead of the US midterm elections, Reuters reported. Reuters also said investors had taken profits after the recent rise in prices.
Strait of Hormuz disruptions remain a supply risk
The waiver does little to resolve disruptions in the Strait of Hormuz, where attacks on oil tankers continue, Sachdeva said, according to Reuters. Fortune identified uncertainty over transport through the strait as a continuing supply risk.
French President Emmanuel Macron began a Gulf tour on Monday aimed at securing oil and diesel supplies to bring down prices, Al-Monitor reported. His office said he would discuss maritime shipments and alternative export routes with Gulf leaders. The visit followed protests in France over rising living costs and fuel prices.
Before leaving for Kuwait, Macron said the visit was needed to ‘secure our supplies,’ Al-Monitor reported. Energy expert Francis Perrin said Gulf countries were eager to supply France and the wider world but would struggle to make firm commitments until the region stabilized.
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Sources and context
- European stocks fall after violent protests in France, while oil drops as Trump puts Russia sanctions on holdFortune, incorporating Associated Press reporting on the oil-price move and sanctions waiver
- Oil prices fall from 5-month high as Trump eases Russia sanctions amid Middle East supply fearsHindustan Times, reporting attributed to Reuters
- Macron opens Gulf tour after violent protests in FranceAl-Monitor, Valérie Leroux
AI-assisted article checked against the listed sources. NewsJaws did not conduct interviews or attend the reported events.