Oil prices slipped on Monday after US President Donald Trump waived sanctions and tariffs on Russia, which may lead to more Russian fuel exports.
Brent crude futures fell $1.94, or 1.77%, to $107.92 a barrel by 0227 GMT after settling at its highest since May 19 on Friday.
US West Texas Intermediate crude was at $100.58 a barrel, down 83 cents, or 0.82%, after closing at its highest since September 17 on Friday.
Trump signed an executive order on Friday waiving key sanctions and tariffs under the law known as the Graham Act, which he signed last month at the urging of lawmakers who wanted to pressure Moscow over its war in Ukraine.
However, Secretary of State Marco Rubio said the president will use up to 60 days to assess the economic impact of the sanctions and tariffs on the global economy.
The move comes after Trump struck a deal with Russian President Vladimir Putin to export diesel to the United States and other countries — starting at about 2.3 million barrels this month and rising to about 7.6 million barrels per month, according to Trump’s announcement. Ukrainian President Volodymyr Zelenskiy said these US actions will hurt Ukraine.
Brent crude oil briefly touched $110 a barrel on Friday for the first time since May as tensions and security threats in the Middle East raised concerns over the safety of shipping and tighter global energy supplies.
“The combination of a softer tone around sanctions and some profit-taking after recent gains is helping to cap the upside in the near term,” KCM Trade chief analyst Tim Waterer said.
While the US waiver on Russian sanctions could lead to higher Russian fuel exports, the mixed messaging has created uncertainty, he added.
“Until the details and duration are clearer, the market is unlikely to fully price in a sustained increase in supply,” he said.
Intensified attacks on commercial vessels cut Gulf crude flows sharply to about 8.5 million barrels per day on a seven-day average last week, from more than 20 million bpd the week before, analytics firm Kpler said in a note on Friday. At least 10 confirmed incidents involving commercial vessels were reported last week, it added.
Potentially raising the stakes in the Middle East war, Egypt said it is ready to provide Saudi Arabia with the support it needs to defend its security and stability against Yemen’s Iran-allied Houthis.