Oil slips after Trump waives new Russia sanctions

Oil prices fell in early Asian trading on Monday, October 19, after President Donald Trump waived new U.S. sanctions and tariffs on Russia, a move that could bring more Russian fuel onto world markets, Reuters reported. Brent crude futures dropped just under 1% after settling on Friday at their highest level since May 19. U.S. West Texas Intermediate futures slipped less. The waiver is Trump's second step in as many weeks toward Moscow as he tries to bring down diesel prices before the November 3 midterms, and it has drawn criticism from both parties.reuters.com

What the order does

Trump signed the executive order on Friday, October 16, two days before the measures were due to take effect on October 18 under the Lindsey O. Graham Sanctioning Russia and Iran Act, which he signed into law in September, ABC News reported. The order waives tariffs of up to 500% on Russian goods and tariffs of up to 100% on the top buyers of Russian crude and gas. It also drops a provision that would have locked existing sanctions in place, which leaves the president free to ease those as well, according to ABC. The waivers stay in effect until Trump or his top officials decide "further action is appropriate," Reuters reported.abcnews.com+1

The order came a week after Trump announced a diesel deal with Russian President Vladimir Putin. On October 9, the Treasury Department issued General License 135, which allows Russian diesel to be sold and imported, including into the U.S. That license runs until April 2027 and is meant to ease a supply shortage caused by the war with Iran, CNBC reported. Trump said Russia would supply 300,000 tons of diesel right away, 500,000 tons in November and 1 million tons after that, Al Jazeera reported. The Washington Post noted that those volumes are a small share of U.S. consumption and that the effect on prices is expected to be limited.cnbc.com+3

Bipartisan backlash

Lawmakers from both parties criticized the move. Republican Sen. Thom Tillis of North Carolina called it "beyond irresponsible." Texas Republican Sen. John Cornyn said, "Lindsey would be appalled." Senate Minority Leader Chuck Schumer said Trump had given Putin "the best birthday gift he'll get this year". On October 13, twelve senators, six of them Republicans, had already urged Trump to cancel the diesel deal, CBC reported.washingtonpost.com+1

Trump defended the waiver as a "very good decision," NBC News reported. In Kyiv, Ukrainian President Volodymyr Zelenskyy said the decision "seems wrong to me" and predicted more relief for Moscow: "Sanctions relief will continue. I think the diesel deal and the move regarding the Lindsey Graham Act are not the end of it. Unfortunately".nbcnews.com+1