Oil tumbles as Trump’s Russia sanctions waiver may lead to more fuel supplies
Trump signed an executive order on Friday waiving key sanctions and tariffs under the law known as the Graham Act, which he signed last month at the urging of lawmakers who wanted to pressure Moscow over its war in Ukraine
Highlights:
- Trump signs executive order to waive Russia sanctions and tariffs
- Rubio says Trump to assess economic impact over 60 days
- Egypt says it is ready to back Saudi Arabia in war against Houthis
Oil prices slipped on Monday after US President Donald Trump waived sanctions and tariffs on Russia, a move that could lead to more Russian fuel exports.
Brent crude futures fell $1.94, or 1.77%, to $107.92 a barrel by 0227 GMT after settling at their highest since 19 May on Friday.
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US West Texas Intermediate crude was at $100.58 a barrel, down 83 cents, or 0.82%, after closing at its highest since 17 September on Friday.
Trump signed an executive order on Friday waiving key sanctions and tariffs under the law known as the Graham Act, which he signed last month at the urging of lawmakers who wanted to pressure Moscow over its war in Ukraine.
However, Secretary of State Marco Rubio said the president would take up to 60 days to assess the economic impact of the sanctions and tariffs on the global economy.
The move comes after Trump struck a deal with Russian President Vladimir Putin to export diesel to the US and other countries, starting at about 2.3 million barrels this month before rising to about 7.6 million barrels a month, according to Trump's announcement. Ukrainian President Volodymyr Zelenskiy said these US actions would hurt Ukraine.
Brent crude oil briefly touched $110 a barrel on Friday for the first time since May as tensions and security threats in the Middle East raised concerns over the safety of shipping and tighter global energy supplies.
"The combination of a softer tone around sanctions and some profit-taking after recent gains is helping to cap the upside in the near term," KCM Trade chief analyst Tim Waterer said.
While the US waiver on Russian sanctions could potentially lead to higher Russian fuel exports, the mixed messaging had created uncertainty, he added.
"Until the details and duration are clearer, the market is unlikely to fully price in a sustained increase in supply," he said.
Intensified attacks on commercial vessels cut Gulf crude flows sharply to about 8.5 million barrels per day on a seven-day average last week, down from more than 20 million barrels per day the previous week, analytics firm Kpler said in a note on Friday. At least 10 confirmed incidents involving commercial vessels were reported last week, it added.
Potentially raising the stakes in the Middle East war, Egypt said it was ready to provide Saudi Arabia with the support it needed to defend its security and stability against Yemen's Iran-allied Houthis.
