Oil prices retreated on Monday after US President Donald Trump waived a sweeping package of sanctions and tariffs targeting Russia, easing concerns that Washington would further restrict Russian energy supplies while Middle Eastern oil shipments remain severely disrupted.
Brent crude futures fell $1.06, or 0.96%, to $108.80 a barrel in early Asian trading on October 19, while US West Texas Intermediate slipped 23 cents to $101.18. The decline followed Friday's rally, when Brent settled at its highest level since May.
The market reaction followed a significant change in Washington's approach to economic pressure on Moscow. Under an executive order signed on October 16, Trump suspended the application of new sanctions and punitive tariffs established under the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026.
The legislation, signed into law in September, provided for additional restrictions on Russian entities and steep tariffs on countries purchasing Russian energy. Its provisions included a proposed 100% tariff on goods from the five largest importers of Russian crude oil and natural gas, alongside measures targeting countries facilitating sanctions evasion.
Trump invoked the law's national-interest waiver, preventing those measures from taking effect for now. Existing sanctions imposed under earlier executive orders remain in place, and the administration has retained the authority to reconsider the exemption.
The decision comes shortly after Washington authorised certain transactions involving Russian diesel. On October 9, the US Treasury's Office of Foreign Assets Control issued General License 135, permitting the sale, delivery, offloading and importation of diesel fuel originating in Russia.
Together, the measures have reduced the immediate threat of additional restrictions on Russian energy trade. They have not, however, established how much additional fuel Russia can deliver or how quickly buyers might receive it.
For India, the waiver removes an immediate threat of new American tariffs tied to purchases of Russian oil. Moscow had already offered to meet India's crude requirements despite Washington's earlier pressure on countries maintaining energy ties with Russia. Indian refiners now have greater room to continue sourcing Russian barrels without the additional tariff measures taking effect.
The easing comes at a time when international oil markets can ill afford another major supply constraint. Disruptions in the Strait of Hormuz and growing threats to Red Sea shipping routes have complicated crude deliveries from the Middle East, driving up transport costs and contributing to the recent rise in prices.
Trump's waiver has therefore relieved one source of pressure without restoring the oil shipments disrupted elsewhere. Brent remains above $100 a barrel, and the volume of additional Russian fuel reaching international buyers has yet to be established. For oil-importing economies, the immediate benefit is reduced exposure to another round of trade restrictions rather than a guaranteed reduction in their energy bills.
