Oil prices fell Monday as traders weighed the prospect of additional Russian crude and refined-product supplies after the United States suspended new sanctions on Russian energy buyers.
The policy shift followed President Donald Trump’s decision to delay new sanctions, which he said could undermine negotiations aimed at ending the war in Ukraine. Trump defended the move as a temporary waiver and said he could impose the sanctions later. Ukrainian President Volodymyr Zelenskyy warned that easing restrictions would strengthen Russia’s war effort and called it a serious mistake for Washington.
The potential increase in Russian supply was tempered by a major Ukrainian drone assault. One person was killed and five were injured, and the attack disrupted operations at the city’s main airport. The terminal handles about 120,000 barrels per day of refined products, mostly fuel oil, although the extent of the damage remained unclear.
The strikes followed a short pause in Ukrainian attacks on Russian energy sites after Trump announced an energy ceasefire on Oct. Zelenskyy said Russia had continued attacking Ukraine’s energy, oil and gas sectors and that strikes over the following week had left tens of thousands of families without power.
Shipping risks added another constraint to the supply outlook. Two tankers were attacked off Saudi Arabia on Friday: one was hit by a rocket-propelled grenade from a small boat 78 nautical miles northeast of Al Jubayl, while another was struck by an unidentified projectile farther offshore. The crews were reported safe, but one vessel sustained damage and the full environmental impact was not immediately known.
The market was therefore balancing the possibility of more Russian fuel reaching buyers against disruptions affecting Russian infrastructure and Middle Eastern shipping lanes. And global markets, while a partial easing of its diesel-export restrictions could release about 500,000 tons internationally.