Brent crude fell 1.76% to $107.93 a barrel on Monday, October 19, as traders weighed the prospect of increased Russian oil exports against continued threats to shipments from the Middle East.
The benchmark remains up 7.57% over the past month and 76.91% higher than a year earlier, according to CFD data tracking Brent crude.
The decline followed a strong rally last week, with expectations of additional Russian supplies helping ease some concerns about tight global markets. US President Donald Trump said he had waived some sanctions on Russia, a move that could allow more Russian energy exports.
However, the administration has given mixed signals about the decision, leaving uncertainty over how much additional supply could reach the market.
Middle East supplies recover, but shipping risks persist
US Energy Secretary Chris Wright said oil flows from the Persian Gulf had recovered to around 80% of their pre-war levels. The improvement suggests that some supplies are returning to the market despite continuing disruption.
However, the recovery remains vulnerable. Three tankers were reported damaged in the Strait of Hormuz over the weekend, while Iranian media reported that another tanker caught fire and exploded after hitting a naval mine in the waterway.
Iran has also said its offer to reopen the strait within seven days remains on the table. The route is a critical passage for global energy shipments, and continued attacks have pushed up shipping and insurance costs.
These risks mean that recovering export volumes have not necessarily translated into a smooth or cheaper flow of oil to buyers. Reuters reported on Monday that higher transport and insurance costs were keeping prices for physical oil deliveries elevated despite the decline in futures prices.
Russia’s supply outlook remains uncertain
Trump’s move to waive some sanctions on Russia has raised expectations that additional Russian oil and fuel could reach global markets. He has also said the United States reached an agreement with Russia on diesel exports.
But the potential increase in supply remains unclear. US Secretary of State Marco Rubio said the administration would take up to 60 days to assess the economic impact of the sanctions decision.
Ukraine’s continued attacks on Russian energy infrastructure could also limit the effect of any easing of restrictions. Ukrainian strikes sparked fires at an oil export terminal and a storage depot in St Petersburg on Sunday, adding another risk to Russia’s ability to maintain and expand shipments.
Supply concerns keep the outlook uncertain
Elsewhere, clashes involving Saudi Arabia and Iran-backed Houthi rebels have continued, adding to concerns about energy infrastructure and shipping routes across the region.
For now, expectations of increased Russian exports and the recovery in Middle Eastern oil flows are helping to ease some immediate supply concerns. But tanker attacks, higher shipping costs and continued strikes on energy infrastructure mean the market remains exposed to sudden disruptions.
Brent’s fall therefore reflects a shift in expectations about available supply rather than a clear end to the risks facing global oil trade.
