The price of North Sea Brent crude oil in trading on Monday (October 19) reached $107.57 per barrel, indicating a decrease of $2.29 or 2.08% compared to the previous day. This comes after Brent oil prices had reached their highest level since May 19 (May 29) on Friday (October 16).
Analysis of Oil Market Conditions
WTI crude oil in the U.S. also decreased by $1.95 or 1.92% to $99.46 per barrel. This price drop occurs as analysts say the increase in fuel supply from Russia to the global market could continue this trend.
The U.S. government, especially on the eve of the midterm elections, is seeking solutions to control oil prices. Donald Trump, the President of the United States, signed an executive order on Friday to suspend or lift certain sanctions and tariffs related to the "Graham Act." This law was enacted to pressure Russia due to its military conflicts with Ukraine.
Political Impacts on the Oil Market
However, Marco Rubio, the Secretary of State, has stated that the President will have 60 days to assess the impact of these sanctions and tariffs on the global economy. In this context, Priyanka Sachdeva, the market outlook manager at Philip Nova, stated that Trump's action may be a desperate attempt to control oil prices, which will have little effect on alleviating the physical supply disruption from the Strait of Hormuz.
Tim Waterer, a senior analyst at KCM Trade, also believes that U.S. exemptions for Russian sanctions could lead to an increase in fuel exports from that country, but uncertainties regarding the details and duration of these exemptions have created doubts in the market.
The price of Brent crude oil reached nearly $110 per barrel on Friday due to concerns about shipping security and reduced energy supply from the Middle East to global markets. According to a report from the ship tracking company "Kpler," security issues have significantly impacted the flow of crude oil from Gulf producers.
DBS Bank predicts that as the U.S. midterm elections approach, oil prices will remain in the range of $100 to $110. Suvro Sarkar, the head of energy research at the bank, noted that the U.S. President is trying to control prices through various measures before the midterm elections. However, these measures are considered short-term solutions and will have little structural impact on supply conditions.
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