Brent crude futures fell $1.43, or 1.30%, to $108.43 a barrel by 2340 GMT on Monday, slipping from a high since May after U.S. President Donald Trump signed an executive order waiving key sanctions and tariffs on Russia that may lead to more Russian fuel supplies, Reuters reported.
The Graham Act Pause and the Diesel Deal
The executive order targets the Graham Act, legislation that Trump signed last month at the urging of lawmakers wanting to pressure Moscow over its war in Ukraine. Tariffs of 100% on the world’s five largest importers of Russian crude oil and natural gas—including China, India, and Turkey—were originally set to take effect on Sunday. However, the legislation grants the president authority to waive portions of the law if he certifies to Congress that halting the sanctions is in the national interest.
Secretary of State Marco Rubio said the administration will use up to 60 days to analyze the economic impact of imposing both sanctions and tariffs on the global economy. Rubio noted that the restrictions involved multiple countries and that high energy prices alongside the Iran war necessitated time to study the right combination of policies. The move follows an agreement struck between Trump and Russian President Vladimir Putin to export diesel to the United States.
Market Shifts and Middle East Tensions
Energy markets reacted swiftly to the shifting policy landscape. West Texas Intermediate crude fell 53 cents, or 0.52%, to $100.88 a barrel on Monday. Just days prior, Brent crude had briefly touched $110 a barrel on Friday for the first time since May, driven by mounting security threats in the Middle East that threatened global energy supplies and shipping safety. Intensified attacks on commercial vessels slashed Gulf crude flows to an average of about 8.5 million barrels per day last week, down sharply from more than 20 million barrels per day the week before, according to analytics firm Kpler. Amid the regional volatility, Egypt announced its readiness to support Saudi Arabia in defending its security and stability against Yemen’s Iran-allied Houthis.
Political Outcry and International Repercussions
The decision to halt the sanctions package drew immediate backlash from lawmakers in Washington. Republican Senator Rick Scott argued that the United States must maintain economic pressure on Russia as the clear aggressor. Fellow Republican Thom Tillis described the move on social media as beyond irresponsible and a capitulation to a Russian dictator who illegally invaded Ukraine. On the diplomatic front, Ukrainian President Volodymyr Zelenskiy stated that the U.S. actions would hurt Ukraine, expressing concern that lifting sanctions would only encourage further attacks.
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