US waives Russia sanctions as Gulf oil shipments face renewed disruption
President Donald Trump signed an executive order Oct. 16 waiving key sanctions and tariffs under the Graham Act, including duties on Russian goods and penalties for countries that buy Russian oil and gas. The measures were due to take effect within days. Earlier Russia sanctions imposed under previous executive orders remain in place.
US Secretary of State Marco Rubio said the administration would use up to 60 days to assess the economic effects. The order specifies no expiration date, and the waiver remains in effect pending further action by the administration.
Brent crude futures fell Oct. 19 from a 5-month high as traders weighed the prospect of more Russian supply against continued Middle East risks. December Brent futures traded around $108/bbl in morning dealings, down 1% to 2%.
Diesel deal
The waiver follows a separate diesel agreement. Trump said Russia would immediately supply more than 300,000 tonnes of diesel to the US and global markets, followed by 500,000 tonnes in November and 1 million tonnes after that. He also cited a further 3 million tonnes, depending on the condition of Russian refineries.
Delivery remains uncertain. Ukrainian strikes have damaged Russian refineries, while Moscow's diesel export restrictions remain partly in place despite easing on Oct. 10.
Middle East risks
The potential increase in Russian fuel exports comes as shipping disruptions continue to constrain Middle Eastern oil supplies. According to Kpler data, Gulf crude flows fell to an average of about 8.5 million b/d last week, compared with more than 20 million b/d the preceding week.
Shipping security has also deteriorated. Kpler reported at least 10 confirmed incidents involving commercial vessels last week. Separately, Iran’s Islamic Revolutionary Guard Corps said a tanker struck a naval mine and exploded in the southern Strait of Hormuz on Oct. 18, according to Iranian media cited by Reuters.
Elevated tanker freight rates and insurance premiums continue to raise delivery costs, limiting the potential relief from additional Russian supplies.