Global crude eases as Trump issues Russian sanctions waiver

Global crude oil benchmarks slipped in early trading on Monday following a decision by US President Donald Trump to waive certain sanctions and tariffs on Russian fuel exports, easing immediate market fears over tightening global energy supplies according to Reuters report.

International benchmark Brent crude dropped $1.06, or 0.96 per cent, to $108.80 a barrel after touching $110 on Friday—its highest level since May. US West Texas Intermediate (WTI) crude also dipped 23 cents, or 0.23 per cent, to $101.18 a barrel.

For Nigeria, where the deregulation of the petrol market means domestic Premium Motor Spirit (PMS) prices track international crude and refined fuel benchmarks, the potential increase in global refined fuel supply could temper imported fuel costs, offering slight breathing room for motorists and businesses navigating persistent inflationary pressures.

The price pull-back follows a week of sharp gains driven by escalating security threats and maritime strikes in the Middle East, which severely choked shipping corridors in the Persian Gulf.

According to the reports, analytics firm Kpler reported that crude flows through the region dropped sharply to roughly 8.5 million barrels per day (bpd) last week—down from over 20 million bpd the previous week—after at least 10 commercial vessels were targeted.

However, Washington’s softer stance on Russian fuel exports prompted quick profit-taking by traders, checking crude’s upward trajectory.

Commenting on the sudden market shift, Chief Analyst at KCM Trade, Tim Waterer, pointed to mixed signals surrounding enforcement and duration.

“The combination of a softer tone around sanctions and some profit-taking after recent gains is helping to cap the upside in the near term,” Waterer noted.

“While the US waiver on Russian sanctions could potentially lead to higher Russian fuel exports, the mixed messaging has created uncertainty,” Waterer added. “Until the details and duration are clearer, the market is unlikely to fully price in a sustained increase in supply.”

Geopolitical risk factors remain elevated across energy markets, particularly after Egypt signaled its readiness to offer military support to Saudi Arabia to protect its critical infrastructure against Houthi strikes emanating from Yemen.

The dual impact on Nigeria’s economy

The fluctuation in global crude prices presents a complex economic balancing act for Nigeria, Africa’s largest oil producer:

• Fuel Import Landing Costs: Higher global crude prices directly inflate the landing cost of refined petrol imported into Nigeria or produced by local refiners like the Dangote Petroleum Refinery. A sustained decline in global fuel benchmarks helps moderate pump prices for Nigerian consumers and businesses.
• Government Foreign Exchange Revenue: Conversely, high crude prices boost Nigeria’s foreign exchange earnings and government revenues from oil exports, helping fund the national budget and support the Naira.

With crude remaining above the $100 per barrel threshold, energy analysts emphasize that domestic fuel prices will stay elevated, but Washington’s move to permit greater Russian fuel flows could prevent extreme spikes in the global market.