Oil falls again as Trump waives some Russia sanctions

Oil prices fell for a second straight session on Tuesday, October 20, as traders weighed President Donald Trump's decision to waive some sanctions and tariffs on Russian energy. Attacks in the Middle East kept a floor under prices. Brent crude edged lower in early Asian trading after Trump's order waived duties on Russian goods and penalties for buying Russian oil and gas, Reuters Thomson Reuters Corporation ↘ 0.07% reported. Attacks on Saudi Arabia and Yemen kept supply fears alive.khaama.com

On Monday, December Brent futures fell 1.0% to $108.72 a barrel and December West Texas Intermediate dropped 0.6% to $98.40 at one point, according to Dow Jones reporting carried by Morningstar ↗ 0.70%. Brent was coming off a close on Friday, October 16, that was its highest since May 19.newsobserver.com+1

What the waiver covers

Trump signed the executive order on October 16. It waives key sanctions and tariffs under the Graham Act, a law he signed last month after lawmakers pushed to pressure Moscow over the war in Ukraine, Reuters reported. Sanctions imposed under earlier executive orders stay in place, and the order has no expiration date. The messages from Washington have been mixed. Trump said on Saturday that he had not yet announced a final decision, and Secretary of State Marco Rubio said officials wanted more time to evaluate the situation, according to Reuters. Rubio said the administration would take up to 60 days to assess the economic impact.khaama.com+3

Trump called the waiver in the national interest and said he did not want measures that could push Moscow away from peace talks over Ukraine, Business Upturn reported. The move has drawn criticism from European officials and from lawmakers in both US parties, ahead of the November midterm elections.businessupturn.com

Hormuz caps the slide

ANZ analysts described the drop as a technical correction after last week's gains. They said the geopolitical risk premium would limit how far prices fall.inspenet.com

Shipping through the Strait of Hormuz is still disrupted. Confirmed crude shipments averaged 10.17 million barrels a day in the seven days through Saturday, about 41% below prewar levels, according to Kpler data cited by Dow Jones. Iran's Revolutionary Guard said a tanker hit a naval mine and exploded in the southern part of the strait on October 18, Oil & Gas Journal reported. High freight and insurance costs are also limiting how much extra Russian supply can help.morningstar.com+1

Morgan Stanley ↘ 2.44% estimates that supplies from affected Gulf producers and Russia are still 5.5 million barrels a day below year-earlier levels. The bank raised its fourth-quarter Dated Brent forecast to $105 a barrel, Dow Jones reported. ING ↘ 1.85% analysts said shipments through Hormuz would only recover for good with more confidence in regional stability, and that a US-Iran agreement would be needed to remove the risk premium.morningstar.com