Oil Prices Drop as Trump Waives Russian Sanctions
Oil prices declined Monday after President Donald Trump waived sanctions on Russia, though Ukrainian drone strikes and Middle East instability tempered the downturn.
Crude oil prices fell on Monday following an executive order signed by Donald Trump on Friday. The order waives sanctions and tariffs on Russia under the Graham Act, facilitating a deal between Trump and Russian President Vladimir Putin to export Russian diesel to the United States and other nations. Exports are expected to start at 2.3 million barrels this month, with the potential to reach 7.6 million barrels monthly. Brent crude futures dropped to approximately $107 per barrel, while West Texas Intermediate fell to around $100 per barrel.
Price declines were partially offset by significant supply disruptions. On Sunday, the Cabinet of Ministers of Ukraine launched the largest drone attack on St. Petersburg since the start of the war, striking an oil terminal and depot that exports roughly 120,000 barrels of refined products daily. President Volodymyyr Zelenskyy stated that the U.S. sanctions waivers would hurt Ukraine.
Simultaneously, instability in the Middle East continues to threaten global supplies. The UK Maritime Trade Operations Centre reported rocket and projectile attacks on tankers off the coast of Saudi Arabia and a tugboat attack near the United Arab Emirates. Reports indicate Iran is providing intelligence and targeting assistance to Houthi militias, which maintain control over the Bab al-Mandeb Strait. These combined hostilities in the Persian Gulf have reduced crude flows from over 20 million barrels per day to a seven-day average of 8.5 million barrels.
