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Global oil prices dropped on Monday as US President Donald Trump signed an executive order to waive sanctions and tariffs on Russian fuel exports. The move, which initiates a 60-day evaluation period for economic impacts, led Brent crude futures to decrease by 1.77% to settle at $107.92 a barrel. US West Texas Intermediate (WTI) crude also saw a decline, falling by 0.82% to $100.58 a barrel, as markets reacted to the prospect of significantly increased global supply.
The policy change stems from a deal between President Trump and Russian President Vladimir Putin regarding diesel exports to the United States. Under the agreement, initial shipments are expected to start at 2.3 million barrels this month, with the potential to scale up to 7.6 million barrels per month. The executive order allows for these imports while the administration monitors the economic repercussions over the next two months, a strategy intended to provide immediate relief to energy markets and consumers.
This price reduction provides a sharp contrast to recent market volatility, where crude oil prices briefly climbed to $110 a barrel due to heightened geopolitical tensions in the Middle East. Security threats, including intensified attacks by Houthi forces on commercial vessels, have previously disrupted Gulf crude flows and pressured global prices. In response to these regional conflicts involving Iranian-aligned groups in Yemen, Egypt has recently reaffirmed its support for Saudi Arabia to help stabilize maritime security and trade.
However, the US decision has drawn criticism from Ukrainian President Volodymyr Zelenskiy, who warned that the waivers could undermine international pressure on Russia and further harm Ukraine’s security interests. Market analysts suggest that while the supply increase is notable, persistent uncertainty regarding the long-term status of these waivers will likely prevent a full market adjustment. As the 60-day review begins, global energy traders remain cautious about the balance between new supplies and ongoing political instability in Europe and the Middle East.