Oil Prices Retreat From Five-Month High as Trump’s Russia Waiver Raises Supply Expectations

GLOBAL MARKETS — Oil prices fell on Monday from a five-month high as traders reassessed the global supply outlook following U.S. President Donald Trump’s decision to waive key sanctions and tariffs on Russia.

Brent crude futures dropped $2.29, or 2.08%, to $107.57 a barrel by 0619 GMT. U.S. West Texas Intermediate crude declined $1.95, or 1.92%, to $99.46 a barrel.

Both benchmarks had ended the previous Friday at their highest levels in several months. Brent briefly touched $110 a barrel, reaching that level for the first time since May as concerns over potential energy supply disruptions intensified.

Trump signed an executive order on Friday suspending key sanctions and tariffs under the Graham Act, which he had signed the previous month following pressure from lawmakers seeking to increase pressure on Moscow over its war in Ukraine.

U.S. Secretary of State Marco Rubio said Trump would take up to 60 days to evaluate the economic effects of the sanctions and tariffs.

The waiver has introduced uncertainty about the volume of additional Russian oil and fuel that could enter international markets. Although the policy could support higher exports, traders are awaiting more details about its duration and implementation before concluding that it represents a lasting shift in supply conditions.

The move follows an agreement between Trump and Russian President Vladimir Putin involving diesel exports to the United States and other countries. Shipments are expected to begin at approximately 2.3 million barrels this month before rising to about 7.6 million barrels per month.

Ukrainian President Volodymyr Zelenskiy has criticized the U.S. measures, arguing that they would harm Ukraine.

At the same time, energy markets continue to face significant risks from disruptions in the Middle East. Attacks on commercial vessels have undermined shipping security and heightened concerns about crude oil transportation through critical maritime routes.

Analytics firm Kpler reported that average Gulf crude flows declined to approximately 8.5 million barrels per day on a seven-day average last week, compared with more than 20 million barrels per day the week before. At least 10 confirmed incidents involving commercial vessels were recorded during the week.

Egypt also said it was ready to provide Saudi Arabia with the support necessary to protect its security and stability against Yemen’s Iran-allied Houthis, adding another regional concern for energy markets.

Despite Monday’s price decline, analysts expect geopolitical risks to remain a factor. DBS forecasts that oil prices will stay within a range of $100 to $110 a barrel as the U.S. midterm elections approach.

Suvro Sarkar, DBS head of energy research, said Washington’s efforts to bring fuel prices down were short-term measures that would have little structural impact on supply.

For businesses and consumers, the outlook for crude prices will depend partly on whether increased Russian exports can compensate for continuing disruptions in other regions. Until the global supply outlook becomes clearer, oil markets are likely to remain sensitive to political decisions and developments affecting maritime transportation.