WTI drops to near $97.50 as US waives Russia oil sanctions
- WTI fell as US waive sanctions on Russia to boost global oil supply.
- Escalating clashes and tanker attacks near the Strait of Hormuz keep supply risks high.
- Ukrainian drone strikes on Russian oil infrastructure in St. Petersburg add further market uncertainty.
West Texas Intermediate (WTI) oil price declines after seven days of gains, trading around 97.40 per barrel during Asian hours on Monday. Crude oil prices slipped following US President Donald Trump’s decision to waive key sanctions and tariffs on Russia, a move expected to boost Russian fuel exports. The executive order signed on Friday paused restrictions under the Graham Act, a bill Trump had signed just last month under pressure from lawmakers seeking to punish Moscow over its war in Ukraine. Secretary of State Marco Rubio noted that the president will take up to 60 days to evaluate the economic impact of this waiver.
Turkey is set to absorb some of the diesel Russia releases into global markets under its agreement with the US. Turkish Energy Minister Alparslan Bayraktar highlighted the deal as crucial for national energy security, noting that while Ankara currently relies heavily on Russia, Iran, and Azerbaijan, it continues to seek diversification through new partnerships with the US and other nations.
Despite the initial price decline, crude markets could soon recover as escalating conflicts in the Middle East and Eastern Europe sustain severe supply risks. In the Middle East, hostilities between Saudi Arabia and Iran-backed Houthi rebels remain intense, highlighted by a recent Saudi helicopter crash near the Yemen border and Houthi strikes targeting Yanbu, a major oil export hub. Furthermore, three tankers were damaged in the Strait of Hormuz over the weekend while Iran’s IRGC Navy reaffirmed that the vital transit route remains closed to unauthorized traffic.
Meanwhile, in Eastern Europe, Ukrainian forces launched one of the war's largest aerial assaults, deploying over 1,000 drones against targets in Russia. The attacks sparked major fires at an oil export terminal and a storage depot in St. Petersburg on Sunday, further compounding global supply uncertainty.
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
Author
Akhtar Faruqui
FXStreet
Akhtar Faruqui is a Forex Analyst based in New Delhi, India. With a keen eye for market trends and a passion for dissecting complex financial dynamics, he is dedicated to delivering accurate and insightful Forex news and analysis.
