Oil Prices Fall as Traders Weigh Russia Sanctions Waiver, Middle East Risks

By Farhan Rafid

Oil prices fell Monday, pulling back after Friday's gains as traders weighed a U.S. decision to waive newly imposed sanctions on Russia against persistent Middle East supply risks.

December Brent crude futures fell 1.8% to $107.86 a barrel, while December West Texas Intermediate futures dropped 1.7% to $97.37 a barrel.

President Trump signed an executive order Friday waiving sanctions and tariffs under a new law targeting Russia, potentially easing restrictions on Russian energy trade. The waiver doesn't affect earlier sanctions.

The decline could reflect a technical correction following Friday's gains, analysts at ANZ Research said. However, further downside could be limited by geopolitical tensions and the risk of additional supply disruptions, they said.

Concerns over Russian supplies persisted after Ukrainian drones struck an oil terminal in St. Petersburg Sunday, The Wall Street Journal reported.

Middle East tensions also remain elevated. Iran has been providing Yemen's Houthi militia with intelligence and targeting assistance for attacks on Saudi Arabia, The Wall Street Journal reported. The group also controls Yemen's coastline along the Bab al-Mandeb Strait, a key route for Saudi oil exports, according to the report.

Shipping risks persisted, with U.K. Maritime Trade Operations reporting an attack on a tugboat near the United Arab Emirates Sunday, following attacks on two tankers off Saudi Arabia Friday.

Despite recovering Middle East crude exports, supplies from affected Gulf producers and Russia remain 5.5 million barrels a day below year-earlier levels, according to Morgan Stanley. The bank said record tanker freight costs, low inventories and geopolitical risks continue to support oil prices, raising its fourth-quarter Dated Brent forecast to $105 a barrel.

Analysts at ING said a sustained recovery in shipments through the Strait of Hormuz would require greater confidence in regional stability, with a U.S.-Iran agreement needed to reduce the geopolitical risk premium.

Write to Farhan Rafid at farhan.rafid@wsj.com

(END) Dow Jones Newswires

October 19, 2026 03:42 ET (07:42 GMT)