Oil slips as Trump's sanction waiver may lead to more Russian fuel supplies

Oil prices declined on Monday as US President Donald Trump waived sanctions and tariffs on Russia, potentially allowing for increased Russian fuel exports. Brent crude futures dropped by 1.3% to $108.43 per barrel, while US West Texas Intermediate crude decreased by 0.52% to $100.88 per barrel. Trump signed an executive order on Friday granting waivers under the Graham Act, which he had previously signed at the urging of lawmakers seeking to pressure Moscow over its war in Ukraine.

However, Secretary of State Marco Rubio stated that the president would take up to 60 days to evaluate the economic consequences of the waiver. This development came following a deal between Trump and Russian President Vladimir Putin to export diesel to the United States. Ukrainian President Volodymyr Zelenskiy expressed concerns that these US actions could adversely affect Ukraine.

Brent crude oil briefly reached $110 per barrel on Friday for the first time since May, driven by tensions and security threats in the Middle East, which raised concerns about the safety of shipping and reduced global energy supplies. Intensified attacks on commercial vessels caused Gulf crude flows to average around 8.5 million barrels per day in the week leading up to the report, down from over 20 million barrels per day in the previous week, according to analytics firm Kpler.

At least 10 incidents involving commercial vessels were reported last week. Egypt has indicated its readiness to provide Saudi Arabia with support to defend its security and stability against Yemen's Iran-allied Houthis.