Brent slips to $107.57 after Trump waives Russia sanctions

Summary

• Brent fell 2.08% to $107.57 a barrel Monday, retreating from a five-month high.
• Trump signed an order Friday waiving sanctions on Russia, potentially raising Russian fuel exports.
• Gulf crude flows stayed depressed at 8.5 million bpd, so the drop reflects Russian supply, not Gulf recovery.

The latest

Brent crude dropped $2.29, or 2.08%, to $107.57 a barrel at 0619 GMT Monday, pulling back from the highest close since 19 May, Reuters reported. West Texas Intermediate fell $1.95, or 1.92%, to $99.46. Reuters attributed the move to profit-taking after Washington waived sanctions on Russia, a decision traders read as opening the door to more Russian barrels.

Details

• The numbers: Brent traded at $107.57 a barrel at 0619 GMT Monday, down $2.29 on the session, while WTI slipped $1.95 to $99.46, according to Reuters. Both benchmarks remain near the top of their recent ranges despite the decline.
• The peak: Brent settled Friday at its highest level since 19 May and touched $110 a barrel during the session, Reuters said. Monday's move erases part of that rally without returning prices to pre-rally levels.
• The trigger: President Donald Trump signed an executive order Friday under the Graham Act waiving sanctions and tariffs on Russia, Reuters reported. Traders treated the measure as a signal that Russian fuel exports could rise, prompting profit-taking across both benchmarks.
• The timeline: Secretary of State Marco Rubio said the president will use a window of up to 60 days to assess the impact of the sanctions, per Reuters. No specific review date or criteria for the assessment were announced.
• Gulf flows: Kpler data cited by Reuters show Gulf crude flows fell to roughly 8.5 million barrels per day on a seven-day average last week, down from more than 20 million bpd the week before — a collapse of well over half in a single week.
• Shipping risk: The flow decline came as attacks on merchant vessels intensified, with at least 10 confirmed incidents, according to Reuters. The report did not identify the parties behind the attacks or indicate when traffic might normalize.
• The forecast: DBS expects crude to hold a $100–110 range through the US midterm elections, Reuters reported. That band sits well above the levels of recent years and implies the bank sees no quick unwinding of the current supply disruption.
• The divergence: The two forces now pull in opposite directions: a potential increase in Russian export volumes against Gulf shipments running at a fraction of their normal rate, leaving Monday's decline driven entirely by the supply side rather than by demand.

Background

The Graham Act sanctions framework targeted Russian energy exports and the tariffs attached to them. Friday's executive order suspends that pressure, and Reuters reported the waiver may allow higher Russian fuel shipments to reach the market.

Between the lines

The price fell on a Russian supply signal, not on any improvement in the Gulf, where flows are still about 8.5 million bpd against more than 20 million a week earlier. For Gulf budget planners, that distinction matters: the revenue support at $107 rests on a disruption that could ease, while the physical shortfall in their own shipments has not been resolved.

What's next

Watch the 60-day sanctions assessment Rubio described, weekly Kpler flow data for any recovery in Gulf shipments, and whether Brent holds the $100–110 band DBS projects into the US midterms.

Source: Reuters via Business Recorder; Shafaq News