Oil prices dropped on October 19 after US President Donald Trump waived sanctions and tariffs on Russia, potentially increasing Russian fuel exports. Brent crude futures fell US$1.43, or 1.30%, to US$108.43 a barrel, while US West Texas Intermediate crude declined by 53 cents, or 0.52%, to US$100.88 a barrel.
The waiver, signed on October 16, suspends key sanctions and tariffs under the Graham Act, which was enacted in September to pressure Moscow over its war in Ukraine. However, Secretary of State Marco Rubio noted that the President will take up to 60 days to evaluate the economic impact of this decision.
The move follows a deal between Trump and Russian President Vladimir Putin to export diesel to the United States. Ukrainian President Volodymyr Zelensky criticized the US actions, stating they would harm Ukraine.
Brent crude had briefly reached US$110 a barrel on October 16, its highest since May, amid rising tensions and security threats in the Middle East. Attacks on commercial vessels have sharply reduced Gulf crude flows to about 8.5 million barrels per day last week, down from over 20 million the previous week, according to analytics firm Kpler.
Egypt has also pledged support to Saudi Arabia in defending against Yemen’s Iran-allied Houthis, potentially escalating the conflict in the Middle East.