Oil prices fell Monday after President Donald Trump paused new Russia sanctions and authorized a temporary route for Russian diesel to reach U.S.
The arrangement followed Trump’s Oct. 9 announcement of a diesel deal with Russian President Vladimir Putin. The Treasury authorization is scheduled to remain in effect through April 2027.
Trump has presented the deal as a way to reduce fuel costs before the Nov. 3 midterm elections. The move also put a sanctions package targeting Russian officials, banks and oil-shipping networks on hold, despite Trump having signed the legislation the previous month. Ukrainian President Volodymyr Zelenskyy said lifting sanctions would strengthen Russia’s war effort, while Trump said he wanted to preserve negotiations and criticized Ukraine’s attacks on Russian energy infrastructure.
The added diesel may offer only limited relief to a market facing larger disruptions. Russian exports are small compared with the estimated global diesel deficit, and damage from Ukrainian strikes has reduced Russia’s refining capacity. On Sunday, Ukraine launched more than 1,000 drones at Russia, setting fires at the Petersburg Oil Terminal and the Ruchi oil depot in St. Petersburg; one person was killed and five were wounded, while Russia said it destroyed 1,015 drones across multiple regions.
Supply risks also remain concentrated around the Strait of Hormuz. Iranian authorities said an oil tanker caught fire after striking a naval mine south of the strait, and at least 10 incidents involving commercial vessels were reported in the Persian Gulf during the previous week.