TLDR
- Brent crude fell 1.8% to $107.86 a barrel and WTI dropped 1.7% to $97.37 on Monday.
- President Trump signed an order Friday waiving new sanctions and tariffs on Russia, but earlier sanctions remain.
- Ukrainian drones hit a St. Petersburg oil terminal, and Iran-backed Houthis continue to threaten Saudi supplies.
- Morgan Stanley says supplies from Gulf producers and Russia are 5.5 million barrels a day below last year.
- Iran says its offer to reopen the Strait of Hormuz within seven days is still open.
Oil prices fell on Monday as traders weighed a U.S. decision to ease sanctions on Russia against ongoing supply risks in the Middle East. Prices had climbed nearly 5% last week.
December Brent crude futures dropped 1.8% to $107.86 a barrel. December West Texas Intermediate futures fell 1.7% to $97.37 a barrel.
Trump waives new Russia sanctions
President Trump signed an executive order Friday that waived sanctions and tariffs under a new law targeting Russia. The order came just days before the measures were set to take effect. It also waived proposed tariffs on countries that import Russian oil.
BREAKING: Trump administration proposes allowing Russia to sell large amounts of natural gas to Europe, offering Putin billions in revenue, with envoys Jared Kushner and Steve Witkoff arguing Ukraine should now consider restarting all pipelines that used to carry it, per the NYT.…
— The Hormuz Letter (@HormuzLetter) October 17, 2026
The waiver does not affect earlier sanctions. Trump said the move was in the national interest of the United States.
In a social media post, Trump said he is working on a Russia-Ukraine peace deal. He said he did not want to push Russia away from the bargaining table.
The order came about a week after Trump signed a diesel import deal with Russia. Some European officials and U.S. lawmakers from both parties criticized the waiver.
Analysts at ANZ Research said Monday’s drop could reflect a technical correction after Friday’s gains. They said further declines could be limited by geopolitical tensions and the risk of more supply disruptions.
Supply risks remain in Russia and the Middle East
Concerns over Russian supplies continued after Ukrainian drones struck an oil terminal in St. Petersburg on Sunday, The Wall Street Journal reported. Ukraine has signaled it will keep attacking Russian infrastructure.
The Wall Street Journal also reported that Iran has been giving Yemen’s Houthi militia intelligence and targeting help for attacks on Saudi Arabia. The group controls Yemen’s coastline along the Bab al-Mandeb Strait, a key route for Saudi oil exports.
Shipping risks also continued. U.K. Maritime Trade Operations reported an attack on a tugboat near the United Arab Emirates on Sunday. Two tankers were attacked off Saudi Arabia on Friday.
Morgan Stanley said supplies from affected Gulf producers and Russia remain 5.5 million barrels a day below year-earlier levels, even as Middle East exports recover. The bank cited record tanker freight costs and low inventories. It raised its fourth-quarter Dated Brent forecast to $105 a barrel.
China offered limited support to prices. Its economy grew slightly more than expected in the third quarter, and refinery output rose for a third straight month in September.
Iranian Foreign Minister Abbas Araqchi said Sunday that Iran’s offer to reopen the Strait of Hormuz within seven days still stands. He criticized the U.S. for not accepting it. The strait’s closure blocked roughly 20% of the world’s oil supplies.
ING analysts said a lasting recovery in shipments through Hormuz would need more confidence in regional stability. They said a U.S.-Iran agreement would be needed to reduce the geopolitical risk premium.
Persian Gulf flows improved in the second week of October but remain fragile, according to recent shipping data.
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