Oil Fades From $110 After Trump Waives Russia Sanctions
Oil slipped from a five-month high on Monday as investors took profits after U.S. President Donald Trump signed an executive order on Friday night waiving key Russia-related U.S. sanctions and tariffs. The pullback followed a spike that had taken Brent crude to $110 per barrel. Traders positioned for additional Russian fuel supplies to clear. Reuters
The sanctions and tariffs covered by the waiver were imposed under the law known as the Graham Act, which Trump had signed the previous month. The Friday night order paused those measures before full implementation. Scope matters here more than headline. Reuters
The high from which the market faded was set on Friday, when Brent touched $110 for the first time since May amid worries about escalating Middle East tensions. That level capped a volatile run. Volatility stayed bid into the weekend. Reuters
The move lower on Monday reversed only part of a choppy sequence. On Oct. 15, Brent crude futures had fallen 1.9% to $104.02 per barrel at 03:35 ET (07:35 GMT) while U.S. WTI futures dropped 1.1% amid potential U.S. sanctions relief. Washington was reported to be considering easing sanctions on oil-carrying vessels, raising hopes of lower shipping constraints, as oil prices retreated. Yahoo Finance Freight was the transmission channel. Fewer constrained hulls means lower voyage cost and easier placement of sanctioned barrels. Anadolu Agency
Geopolitical risk had already been repriced once this summer. Brent prices rose on a Friday after U.S.-Iran talks in Switzerland were abruptly called off. CNBC That episode left the market sensitive to headline breakdown in negotiation.
The U.S. Energy Information Administration expects the Brent crude oil spot price to average $105 per barrel in Q4 2026. The agency expects the Brent spot price to fall to an average of $84 per barrel next year. EIA The curve implied is steep.
The broader context here is a market trying to price two supply impulses at once. One is outage risk tied to the Middle East and the collapse of bilateral talks. The other is a return of marginal Russian volumes and sanctioned tonnage if waivers hold. Prompt strength into $110, followed by profit-taking on a waiver headline, fits a market long geopolitical premium and short physical length.
In my view, desks should separate what is known from what is priced. What is known is the waiver signature, the statutory vehicle, and the sequence of spot moves from $104.02 to $110 and back. What is priced is an assumption about persistence, compliance, and throughput. Waivers can be narrowed, reversed, or offset by freight, insurance, and counterparty caution. That distinction explains why the initial reaction favored selling futures rather than a full reset of term structure.
Looking at what this means for positioning, the EIA profile of $105 in Q4 moving toward $84 next year frames the debate without settling it. If Russian barrels return and vessel constraints ease, prompt tightness can unwind quickly. If Middle East risk reasserts, the premium can rebuild just as fast. Exposure to headline duration is high. Discipline around tenor, liquidity, and basis is doing more work than directional conviction.
