SINGAPORE: Brent crude fell 2.08% to $107.57 a barrel on Monday as oil prices retreated after US President Donald Trump waived key sanctions and tariffs on Russia.
Investors took profits after the decision raised expectations of more Russian fuel exports. However, analysts questioned whether additional shipments could offset disruptions to Middle Eastern supplies. Brent had lost $2.29 a barrel. US West Texas Intermediate (WTI) crude dropped $1.95, or 1.92%, to $99.46 a barrel.
Both benchmarks had finished the previous session at recent highs. Brent recorded its strongest settlement since May 19, while WTI closed at its highest since September 17.
Trump signed the waiver on October 16 under the Graham Act. He had approved the legislation last month after lawmakers sought stronger economic pressure on Moscow over its war in Ukraine.
US Secretary of State Marco Rubio said the president would take up to 60 days to assess the global economic impact of the sanctions and tariffs.
Read: Oil Prices Rise 2%; Brent Reaches $106.76 After Saudi Attacks
While Russian exports could increase, KCM Trade chief analyst Tim Waterer cautioned that mixed US messages had created uncertainty. Markets needed clearer details about the waiver’s scope and duration before pricing in a lasting supply increase, he said. Shipping disruptions remain a concern.
Kpler, an analytics firm, estimated that Gulf crude flows averaged about 8.5 million barrels per day over seven days last week. That was down from more than 20 million barrels per day the previous week.
In an October 16 note, Kpler attributed the decline to intensified attacks on commercial vessels. It recorded at least 10 confirmed incidents involving such ships during the week.
Priyanka Sachdeva, head of market insight at Phillip Nova, argued that sanctions relief did little to resolve physical supply disruptions in the Strait of Hormuz.
Separately, Trump reached an agreement with Russian President Vladimir Putin for diesel exports to the United States and other countries. Shipments were set to begin at about 2.3 million barrels this month, then rise to roughly 7.6 million barrels per month. Ukrainian President Volodymyr Zelenskiy warned that the US actions would hurt Ukraine.
DBS forecast crude trading between $100 and $110 a barrel going into the US midterm elections. Its head of energy research, Suvro Sarkar, described Washington’s measures as temporary fixes with little structural effect on supply.
(With additional input from Reuters)
