Brent Slips From Five-Month High After Trump Waives Russia Sanctions in Exchange for Diesel

Brent crude fell $2.29, or 2.08 percent, to $107.57 a barrel on Monday, Business Recorder reported, which also reported that Brent had briefly touched $110 on Friday, its first time above that level since May. Traders took profits after President Donald Trump waived sanctions and tariffs on Russian energy, and Investing.com reported that the market is weighing the waiver against continuing supply risk in the Middle East.

Trump signed the executive order on October 16. It suspends measures under the Sanctioning Russia Act, the law named for Senator Lindsey Graham. He signed it a week after agreeing with President Vladimir Putin that Russia would export diesel to the United States and other countries, according to Stocktwits. Volumes start at about 2.3 million barrels this month and rise to about 7.6 million barrels a month, roughly 250,000 barrels a day, a modest amount against global supply. Analysts quoted by Business Recorder said it is unclear how the waiver will be applied or how long it will last.

Washington is also paying directly to ease fuel costs. Trump said the Department of Agriculture will launch an $8 billion program to offset diesel costs for farmers, The Hindu reported, and the department's Farm Service Agency will run it. The subsidy keeps diesel demand from falling even as the government works to bring more supply into the market.

Producers in the Western Hemisphere are gaining from the disruption in the Gulf. The Financial Times reports a surge in investment and output from Canada to Argentina as buyers replace barrels lost to the Hormuz disruption. In Neuquén, Argentine President Javier Milei claimed part of the credit for record exports from the Vaca Muerta shale field, defended the large-investment incentive regime and said the peso is not overvalued, Clarín reported. The industry backs his reforms, Clarín wrote, but is worried that rising country risk will raise its borrowing costs. Argentina's sovereign spread closed at 655 basis points in early October, according to El Economista.