US Waives Russia Sanctions as Gulf Flows Halve on Shipping Disruption

President Donald Trump signed an executive order Oct. 16 waiving key sanctions and tariffs under the Graham Act, including duties on Russian goods and penalties for countries buying Russian oil and gas — measures that were due to take effect within days. Earlier Russia sanctions issued under previous executive orders stay in place.

The waiver arrives with Gulf crude flows already squeezed. Kpler data show shipments through the region averaged about 8.5 million b/d last week, down from more than 20 million b/d the week before. That's the operational number doing the heavy lifting here: half the world's most important export artery, effectively throttled.

How long does the waiver last?

US Secretary of State Marco Rubio said the administration will use up to 60 days to assess the economic effects. The order specifies no expiration date. The waiver stays in effect pending further action by the administration, which leaves traders guessing on timing rather than working from a deadline.

The market's first read was bearish. December Brent futures traded around $108/bbl in morning dealings Oct. 19, down 1% to 2% from a 5-month high, as traders weighed the prospect of more Russian supply against continued Middle East risk. That price action is analysis to attribute — traders weighing supply against disruption, not a settled verdict.

What does the diesel deal deliver?

The waiver follows a separate diesel agreement. Trump said Russia would immediately supply more than 300,000 tonnes of diesel to US and global markets, then 500,000 tonnes in November and 1 million tonnes after that. He cited a further 3 million tonnes, depending on the condition of Russian refineries.

Delivery is the open question:

• Ukrainian strikes have damaged Russian refineries.
• Moscow's diesel export restrictions remain partly in place despite easing on Oct. 10.
• Tanker freight rates and insurance premiums remain elevated, raising delivered costs and limiting the relief Russian barrels can offer.

In short, the tonnages are announced, not secured.

How bad is the shipping picture?

Disruption on the water is what makes the Russian barrels matter at all. Kpler counted at least 10 confirmed incidents involving commercial vessels last week. Separately, Iran's Islamic Revolutionary Guard Corps said a tanker struck a naval mine and exploded in the southern Strait of Hormuz on Oct. 18, according to Iranian media cited by Reuters.

Combine the flow data with the incident count and the pattern is clear: the Strait of Hormuz is now the swing variable for global supply, and not in a comfortable direction. Elevated freight and insurance costs compound the squeeze, meaning every additional Russian tonne arrives at a price.

What to watch

Watch three things: whether Russian diesel cargoes actually load on the announced schedule, whether the 60-day assessment produces a new deadline or an open-ended waiver, and whether Gulf flows recover toward the 20 million b/d mark. Until shipping security improves, the waiver buys time — not barrels.