Daily · US Waiver and Energy Crisis · October 17, 2026

Key points

US Waives Graham Act Sanctions

US President Donald Trump signed an executive order on October 16 waiving key provisions of the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026, which he had signed into law on September 18. The order suspends duties of up to 500% on Russian goods and up to 100% on goods from countries that are top purchasers of Russian crude oil or natural gas, including China and India. The waivers remain in effect until Trump or the Secretary of State determines further action is appropriate.

The move follows an agreement announced last week between Trump and Russian President Vladimir Putin, under which Russia would supply more than 300,000 tonnes of diesel immediately, followed by 500,000 tonnes in November, 1 million tonnes thereafter, and a further 3 million tonnes within a short period. Russian special representative Kirill Dmitriev called the suspension a 'historic moment,' stating the act could have halted economic cooperation between Russia and the United States. The order does not lift existing US sanctions against Russia under earlier executive orders.

The legislation had been championed by the late Senator Lindsey Graham, who died in July 2026, and passed with bipartisan support. Senator Richard Blumenthal, a co-drafter, condemned the waiver. Ukrainian President Volodymyr Zelenskyy warned that the diesel agreement could set a precedent for further sanctions relief, stating, 'Sanctions will be lifted after gas. They will be lifted on something else.' European Council chief Antonio Costa said it was not time to relieve Russia's sanctions. A bipartisan group of 20 US lawmakers had previously urged Trump to apply the law's sanctions to their fullest extent.

The waiver allows Trump to avoid conflicts with Russian energy buyers and continue cooperation on global diesel supply, which has risen amid the US-Israeli war on Iran. The decision limits immediate opportunities for Congress to challenge the move, as it is in recess until after the November 3 midterm elections. Representative Gregory Meeks has introduced legislation to block the separate diesel deal.

Oil Hits $110 Amid Hormuz Escalation

Brent crude futures hit a session high of $110 per barrel on Friday for the first time since May, closing at $109.86, a gain of 3.7%. US West Texas Intermediate rose 3.5% to settle at $101.41 per barrel. The price surge was driven by Iran escalating attacks in the Strait of Hormuz and Houthi missile strikes on Saudi Arabia. At least nine tankers and cargo ships came under attack in the strait since Sunday, with Iran sinking the Singapore-registered container ship GFS Pride on Wednesday.

Crude exports through Hormuz stood at 9.4 million barrels per day for the week ended Wednesday, about 70% of the pre-Iran-war average, according to Kpler. Saudi Arabia intercepted several missiles over the Red Sea, including one heading toward the Yanbu oil export terminal. The Houthis attacked Riyadh's international airport on October 10, killing 12 and injuring more than 300. US diesel prices averaged $6.33 a gallon on Friday, more than 70% above the same period last year.

The International Energy Agency agreed to release more than 20 million barrels of fuel, and the US Department of Energy issued a request for proposals for an exchange of up to 17 million barrels from its Strategic Petroleum Reserve. The SPR currently holds about 283 million barrels; if companies take the full 17 million before repayments arrive, inventories would fall to roughly 266 million barrels, inside the operational minimum zone. US commercial crude inventories declined more than 8 million barrels for the week ended October 9 due to production shut-ins from Hurricane Isaias.

In Switzerland, the average price for a litre of unleaded 95 petrol rose by more than 2% to 2.16 Swiss francs. The Swiss economic security authority released mandatory reserves for two weeks, citing low Rhine water levels and reduced pipeline deliveries. The US administration signaled it was ceasing the use of military force against Iran and embarking on a path of economic suffocation through tougher sanctions, while President Trump stated the war will end 'very very soon.'

EU Confirms China Trade Kill Switch

European Commission President Ursula von der Leyen confirmed that the EU will develop a new instrument for 'decisive action by limiting access to the single market where it is in the union's interest – fast and immediately.' The 27 EU leaders gave unanimous support to the instrument at the European Council summit. Von der Leyen identified chemicals and machinery as priority sectors, while French President Emmanuel Macron said the bloc should target chemicals, plastics, and ferroalloys.

The instrument would need the support of 13 of 27 member states to be triggered and is expected to be proposed in December as part of a package including a diversification instrument and a solidarity mechanism. China's Ministry of Commerce stated that 'the EU should not fantasise about gaining benefits through pressure, nor should it underestimate China's determination and ability to safeguard its own interests.' Lithuanian President Gitanas Nauseda described the kill switch as an extreme measure to restrict the entry of Chinese products, including a complete closure of the market.

It is acknowledged that making the instrument compliant with World Trade Organization rules will be challenging. The move aims to redress a trade imbalance that has given China dominance over many European manufacturing sectors, with direct implications for supply chains and market access for companies operating between the EU and China.

Skydance Merger Completes

Paramount completed its $110 billion acquisition of Warner Bros. Discovery in October 2026, creating the combined entity Skydance, which comprises Warner Brothers, Paramount Pictures, HBO, Paramount+, CNN, and CBS. Skydance began with nearly $80 billion in debt and aims to reduce costs by $6 billion in structural and tech-stack cost savings over the next three years.

The European Commission passed the deal in July subject to conditions: Skydance must unravel its ties from the Universal-Paramount joint venture United International Pictures within thirteen months of financial close and refrain from entering joint distribution arrangements for ten years. As part of legally binding antitrust settlements with 12 US states and the US Department of Justice, Skydance is required to produce at least 30 films per year for its first two years, rising to 32 films for the subsequent three, with penalties for shortfalls.

Under France's SMAD regime, foreign on-demand audiovisual service providers targeting France must contribute 20-25 percent of their French revenue towards European and French-language productions. A subsequent Paramount-HBO operation would aggregate subscription revenue, increasing local content obligations. The creation of Skydance reshapes global media distribution and content investment, with direct implications for European regulatory frameworks and streaming market competition.

Ukraine Energy Strikes and EU Summit

Russia struck Ukrainian energy and industrial infrastructure across multiple regions, hitting 15 or more critical power facilities. The strikes targeted a steelworks in Kryvyi Rih, a steel plant in Zaporizhzhia, an auto-repair enterprise in Lutsk, and a substation in Ternopil oblast. Ukraine's Air Force said Russia launched 332 drones and missiles overnight, of which 293 were intercepted or neutralised. At least eight people were killed and nearly 60 injured.

Ukrainian President Volodymyr Zelenskyy told the European Council that the war will cost €155 billion next year, with at least €70 billion needed from the EU for defence and weapons. EU leaders delayed key decisions to a later date, with nothing of substance put down in ink, as elections loom in Spain and France. President of the European Council Antonio Costa said Ukraine 'remains a priority' and asked the European Commission to come up with a proposal to pull together more funds for the country in 2027.

Reports emerged that Ukraine has restricted SpaceX's Starlink military application, Starshield. SpaceX CEO Elon Musk said the US government and president were ultimately responsible for any curbs on the network. Reuters reported that the order to slow Ukraine's military-grade Starshield service came from the White House. Zelenskyy said the speed of Starlink had still not been fully restored but had improved.

France Protests and ECB Policy

Clashes between protesters and police broke out in Paris, Lyon, and Marseille ahead of nationwide demonstrations expected to draw several hundred thousand people. More than 100 people had been arrested in Paris by midday Saturday. The protests began in mid-September at a high school in the Paris suburb of Creteil over dilapidated buildings and overcrowded classrooms, and have spread to thousands of upper secondary schools. Yellow vest activists called on supporters to join, with more than 1,750 planned protest locations across the country.

France recorded a deficit of 152.5 billion euros last year, equivalent to 5.1 percent of GDP, compared with the EU average of 3.1 percent; public debt stood at 115.6 percent of GDP. Prime Minister Sebastian Lecornu said, 'This is a moment of fatigue in the country. We are in an atmosphere of perma-crisis: wars, inflation and issues surrounding purchasing power.'

ECB President Christine Lagarde told the IMF's International Monetary and Financial Committee that headline inflation rose to 3.8% in September and is expected to stay above target into the first half of 2027. The Governing Council raised key rates by 25 basis points in September following a 25 bp increase in June. Lagarde said the energy shock is too large to 'look through' but a measured response remains appropriate to keep inflation in check.

Our read

The US waiver of the Graham Act sanctions represents a significant shift in policy, prioritizing immediate energy price relief over long-term strategic pressure on Russia. This move, combined with the escalation in the Strait of Hormuz, creates a dual supply risk that is likely to keep energy prices elevated through winter. For European and Gulf stakeholders, the EU's 'kill switch' against China and the completion of the Skydance merger signal a tightening regulatory environment for trade and media consolidation. The inability of the EU to commit concrete 2027 funding for Ukraine, alongside the Starshield disruptions, suggests a widening gap between US and European strategic priorities. Decision-makers should review exposure to Russian energy suppliers, monitor the implementation timeline of the EU's China trade instrument, and assess the impact of elevated energy costs on operational budgets.

This analysis was produced automatically by a large-language-model system from the public sources listed below. It is AI-generated content: it reflects the sources and the model's processing, not an editorial opinion, and may contain inaccuracies. It is not investment, financial or legal advice and contains no call to action; base decisions on the original sources and on advice from qualified professionals.

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