Oil prices tumble as Russian export prospects outweigh Gulf shipping risks

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Oil prices tumble

Highlights

Brent falls 1.90% as Russian sanctions ease.
Gulf crude flows plunge amid tanker attacks.
Ukrainian strikes add uncertainty to oil supply.

December Brent futures fell 1.90% to $107.77 a barrel, while December West Texas Intermediate (WTI) futures dropped 1.78% to $97.26. The retreat came after President Donald Trump waived key sanctions and tariffs on Russia, a decision that could increase exports and ease pressure on energy prices. The move comes amid continuing disruptions to global oil shipments, as CNBC reported.

Russian sanctions waive pressures on oil prices

Trump signed an executive order Friday suspending major restrictions imposed under the Graham Act, which was introduced last month to increase pressure on Moscow over the war in Ukraine. Secretary of State Marco Rubio indicated that the administration would assess the economic effects over a period of up to 60 days. The temporary nature of the waiver leaves uncertainty over how much additional Russian oil and fuel could enter the market.

The decision followed an arrangement to expand Russian diesel exports to the United States and other destinations. Initial shipments are expected to total about 2.3 million barrels this month, with monthly volumes potentially rising to 7.6 million barrels. Ukraine criticized the policy change, while traders weighed whether increased Russian exports could offset supply losses elsewhere.

Tanker attacks and Ukrainian strikes threaten supplies

Security conditions in the Persian Gulf remained unstable after two tankers were attacked near Saudi Arabia on Friday. British maritime authorities reported that one vessel was targeted with a rocket-propelled grenade, while another was struck by an unidentified projectile. Repeated attacks have disrupted shipping through the Strait of Hormuz and surrounding waters.

Kpler estimated that Gulf crude flows fell to approximately 8.5 million barrels per day last week, down from more than 20 million barrels per day the previous week. Meanwhile, Ukrainian drone strikes triggered fires at oil facilities in St. Petersburg on Sunday. The affected export terminal normally handles about 120,000 barrels per day of refined products, although the extent of the damage remains unclear.

Supply disruptions limit prospects for lower prices

The competing supply developments leave crude markets facing an uncertain outlook. Additional Russian exports could ease shortages, but attacks on Gulf shipping have sharply reduced the volume of oil reaching international buyers. Brent briefly reached $110 a barrel Friday before retreating as traders reassessed the potential impact of U.S. sanctions relief.

The scale of the disruption also limits how quickly prices might fall. With Gulf crude shipments running far below the previous week's levels, any sustained recovery depends on safer shipping conditions. Until then, uncertainty over Russian exports and Middle East supply routes is likely to keep oil prices volatile.

Earlier, we reported that oil market risks renewed pressure as Saudi and Russian energy infrastructure comes under threat.

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