Oil prices fell more than 2% and Asian stock markets traded in a split direction on Monday after President Trump signed an executive order late Friday pausing a new round of mandatory U.S. sanctions on Russia just before they were due to take effect, easing fears of a sharper squeeze on global energy supply.
Brent crude, the international benchmark, dropped 2.5% to $107.16 a barrel, while U.S. benchmark West Texas Intermediate fell 2.2% to $96.84. Both remain well above levels seen before the Iran war disrupted shipping, and uncertainty over tanker traffic through the Strait of Hormuz continued to put a floor under prices.
The new sanctions were set to kick in under the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026, which Trump signed into law last month and which set a 30-day deadline — Oct. 18 — for key enforcement provisions to begin. Twenty-two members of the House, from both parties, had written to the White House last week demanding full enforcement and asking whether the administration intended to delay any provisions or grant exemptions. The Friday order effectively did both, according to wire reports.
A pattern of easing pressure on Moscow
Monday's order extends a run of moves this month that have softened U.S. pressure on Russian energy. On Oct. 9, Trump announced on social media that he had struck a deal with President Vladimir Putin for Russia to supply more than 300,000 tons of diesel immediately, an arrangement aimed at lowering U.S. fuel prices ahead of the Nov. 3 midterm elections. The Treasury Department followed with a temporary license allowing the diesel onto global markets — the first sanctions relief on Russian diesel lasting longer than the standard 30-day window since the start of the war in Ukraine in February 2022.
Ukrainian President Volodymyr Zelensky criticized the diesel arrangement at the time, and congressional Democrats have called the broader pattern a betrayal of Kyiv and European allies. The Graham Act passed Congress with large bipartisan majorities specifically to limit the president's room to waive penalties on purchasers of Russian oil and gas, though it still leaves the administration considerable discretion over tariff rates and enforcement timing.
Markets read Friday's order as reducing the odds of a sudden cut in Russian export volumes, pushing oil lower even as the broader geopolitical backdrop remains tense.
Asia trades mixed as tech volatility lingers
Equity markets across Asia diverged. South Korea's Kospi rose 1.8% to 5,768.01, clawing back part of a sharp drop from last week, with Samsung Electronics up 1.2% and SK Hynix up 0.4%. Japan's Nikkei 225 slipped 0.6% to 64,916.70 as Tokyo Electron fell 2.6% and SoftBank Group dropped 2%. China's Shanghai Composite added 0.4% to 3,730.92 after third-quarter GDP growth of 4.5% beat expectations, though memory chipmaker CXMT fell more than 7% despite forecasting strong profit for the first nine months. Australia's S&P/ASX 200 gained 0.4%, Taiwan's Taiex slipped 0.6% and India's Sensex fell 0.9%. Hong Kong's market was closed for a holiday.
The moves followed a rough Friday on Wall Street, where the S&P 500 fell 1.1%, the Dow Jones Industrial Average slid 0.3% and the Nasdaq Composite dropped 2.1% amid renewed doubts about the financing underpinning the artificial-intelligence buildout. U.S. futures edged higher Monday morning ahead of a heavy week of earnings from Tesla, Netflix, Meta Platforms, General Motors and IBM.
Sharp, short-lived sell-offs are common even in long-term rallies as tech volatility is likely to rise further while the AI boom continues to inflate.
Capital Economics
The 10-year U.S. Treasury yield eased to roughly 5.07% early Monday from about 5.13% Friday, after touching 5.35% earlier this month — its highest level since 2002 — on inflation concerns tied to the Iran war's energy shock and rising federal debt. The dollar slipped to 157.98 yen from 158.10, and the euro traded at $1.1218, down from $1.1234.
Traders said this week's earnings slate, along with any further clarity from Washington on how strictly the Graham Act's remaining provisions will be enforced, would set the tone for markets into month's end.
