Oil prices dropped on Monday after Donald Trump ordered a waiver of key Russia sanctions and tariffs, a move the market read as opening the door to more Russian fuel reaching global buyers. In early Asian trading, Brent changed hands around $108.43 a barrel, off $1.43 — a 1.30% pullback — while US West Texas Intermediate eased 53 cents, 0.52%, to $100.88. The dip trimmed Friday's spike, when Brent briefly printed $110, a level not seen since May.
The order suspends penalties imposed under the Graham Act, legislation Trump signed only last month under pressure from lawmakers who wanted tougher action against Moscow over the Ukraine war. Rubio, the US secretary of state, put a roughly two-month clock on the decision, saying the White House will spend up to 60 days studying the move's economic fallout before judging what stays and what goes. Behind the move sits a separate agreement Trump struck with Vladimir Putin to ship Russian diesel to the United States.
Volodymyr Zelenskiy pushed back immediately. Ukraine's president said the waiver will hurt Kyiv's war effort, framing it as a concession granted without reciprocal steps from Moscow.
Why it matters
This is a tug-of-war story, and both sides have real numbers behind them. On the bearish side, even the prospect of extra Russian barrels matters in a market already paying a steep geopolitical premium. Brent is still up more than 6% from its October 2 close of $102.25, and WTI has climbed nearly 11% from $91.11 over the same stretch — a fast run driven mostly by fear, not by falling inventories. Any signal that supply lines could loosen gives longs a reason to take profits.
The bullish side is shipping. Analytics firm Kpler counted at least 10 confirmed attacks on commercial vessels last week, and its Friday note estimated Gulf crude traffic dropped to roughly 8.5 million barrels daily measured across a seven-day window, down from more than 20 million the week before. That is a 57.5% drop in seaborne flow through the world's most important oil corridor in a single week. No waiver changes how many tankers are sitting idle or rerouting.
Egypt's pledge to help Saudi Arabia defend against Yemen's Iran-aligned Houthis adds another layer of regional tension that the market will not price away quickly.
What to watch
- The 60-day review clock Rubio flagged: any sign the waiver gets narrowed or reversed flips the supply signal back to bullish.
- Vessel-incident data this week — Kpler's flow figures become the weekly truth check on physical tightness.
- The Brent-WTI spread, currently about $7.55 ($108.43 vs $100.88), which tracks how tight Atlantic supply really is.
- US-Russia diesel shipments: volumes and timing under the Putin deal will show whether this is symbolism or actual barrels.
Oil price arc — fear premium still priced in
| Marker | Brent ($/bbl) | WTI ($/bbl) | Source |
|---|---|---|---|
| Oct 2 close | 102.25 | 91.11 | Yahoo Finance daily candles |
| Friday intraday peak | 110.00 | — | Reuters wire (first $110 since May) |
| Monday early trade | 108.43 | 100.88 | The Economic Times |
| Net move, Oct 2 to Monday | +6.05% | +10.72% | MarketRadar math |
MarketRadar take
Near-term bearish for oil, medium-term balanced. Monday's slide is supply-relief selling into a 6-11% two-week rally — reasonable, not panicky. But the Gulf flow data is the harder number: 8.5 million barrels per day against a 20-million baseline means the physical market is genuinely tight, and one executive order cannot un-block a shipping lane. Watch whether Brent holds above $105 this week. A break under it would signal the fear premium is truly deflating; failure to hold tells you the waiver was priced as a headline, not as barrels.
