Global oil prices decline following US decision to exempt Russia from sanctions
Oil prices experienced a noticeable decline on Monday after US President Donald Trump issued a decision exempting Russia from a package of sanctions and customs duties that could have potentially contributed to boosting Russian fuel exports to global markets. Brent crude futures recorded a drop of 2.02 dollars to reach 107.84 dollars per barrel by 04:18 GMT, following their close in the Friday session at their highest level recorded since the nineteenth of May. In the same context, US West Texas Intermediate crude reached 97.40 dollars per barrel, registering a decrease of 1.62 dollars, after ending Friday's trades at its highest level since the seventeenth of September. The US President had signed an executive order last Friday exempting Moscow from key sanctions and tariffs imposed under the Graham Act, which was signed last month in response to demands from American lawmakers seeking to increase pressure on the Russian side against the backdrop of military operations in Ukraine. However, Secretary of State Marco Rubio clarified that the US administration will utilize a period of up to sixty days to conduct a thorough assessment of the potential economic repercussions of these sanctions and tariffs on the global economy. These developments come in the wake of Trump concluding a bilateral agreement with Russian President Vladimir Putin to export diesel shipments to the United States and other international markets, with the supplied quantities starting at about 2.3 million barrels during the current month before gradually rising to reach about 7.6 million barrels per month according to official statements. In contrast, Ukrainian President Volodymyr Zelensky expressed his dissatisfaction, affirming that these measures taken by the American side will inflict severe damage on his country. Brent crude prices had briefly touched the 110 dollars per barrel level during Friday's trading for the first time since May, affected by escalating tensions and security threats in the Middle East region, which raised serious concerns regarding the safety of maritime navigation and global energy supply levels. In this regard, market analyst at KCM Trade, Tim Waterer, pointed out that the combination of a more lenient tone regarding sanctions and profit-taking operations following recent gains contributed to curbing the upward momentum in the near term. He added that the US exemption of Russia from sanctions may support Russian fuel flows, but the conflicting official messages created a clear state of uncertainty in the markets. He emphasized that until all details and timeframes become fully clear, it is unlikely for the market to fully price in a sustainable increase in supply. On the other hand, Kepler analytics company noted in a memo issued last Friday that the pace of escalating attacks against commercial vessels led to a sharp decline in Gulf crude flows, dropping to about 8.5 million barrels per day as an average over seven days of the past week, compared to more than 20 million barrels per day during the preceding week. The company explained that at least ten confirmed incidents targeting commercial vessels were monitored during the past week. Regionally, Egypt announced its complete readiness to provide all necessary forms of support to Saudi Arabia aimed at defending its security and internal stability.
