Crude oil prices pulled back from a five-month peak on Monday in Singapore trading, as investors locked in gains after US President Donald Trump suspended sanctions and tariffs on Russia. The move could allow more Russian fuel to reach global markets. Brent crude futures fell $2.29, or 2.08%, to $107.57 a barrel by 0619 GMT, having settled on Friday at their highest level since May 19.
US West Texas Intermediate crude was trading at $99.46 a barrel, down $1.95 or 1.92%, after closing Friday at its highest since September 17.
Trump’s waiver and the Russian diesel deal
Trump signed an executive order on Friday that sets aside key sanctions and tariffs under the Graham Act. He had signed that law last month after lawmakers pressed him to increase pressure on Moscow over its war in Ukraine. Secretary of State Marco Rubio said the president would take up to 60 days to assess how the measures affect the global economy.
The waiver follows a deal Trump struck with Russian President Vladimir Putin to export diesel to the United States and other countries. Shipments are set to start at about 2.3 million barrels this month and rise to roughly 7.6 million barrels a month. Ukrainian President Volodymyr Zelenskiy said the US actions would harm Ukraine.
Analysts question the market impact of the waiver
Priyanka Sachdeva, head of market insight at Phillip Nova, said the move looked like another attempt by Trump to keep oil prices in check before the US midterm elections. She added that it does little to address physical supply disruptions in the Strait of Hormuz, where oil tanker attacks continue.
Tim Waterer, chief analyst at KCM Trade, said the waiver could lift Russian fuel exports, but mixed messaging had created uncertainty. “Until the details and duration are clearer, the market is unlikely to fully price in a sustained increase in supply,” he added.
Gulf crude flows fall as Middle East tensions rise
Brent briefly touched $110 a barrel on Friday for the first time since May, as security threats in the Middle East raised concerns about shipping safety and tighter energy supplies. Analytics firm Kpler said in a note on Friday that intensified attacks on commercial vessels cut Gulf crude flows to about 8.5 million barrels per day on a seven-day average last week, down from more than 20 million bpd the week before. It also said at least 10 confirmed incidents involving commercial vessels were reported last week.
Egypt said it is ready to give Saudi Arabia the support it needs to defend its security and stability against Yemen’s Iran-allied Houthis, a development that could add to tensions in the wider Middle East war.
DBS expects oil to remain in a $100 to $110 range heading into the US midterms, with Iran and its proxies keeping fuel prices a key concern for American voters. Its head of energy research, Suvro Sarkar, said: “The US president is trying various moves to suppress prices ahead of the midterms without any direct concession to Iran.” He added that the measures, including the Russia waivers, were “short-term fixes” that will have barely any structural impact on the supply situation.
