Global oil prices declined on Friday after a sharp rally over the past week, as the United States signalled possible intervention in energy markets and granted waivers allowing Indian refiners to purchase Russian crude stored on tankers.
The developments come amid heightened volatility in global oil markets following the outbreak of a military conflict involving the United States, Israel and Iran on February 28, which has disrupted energy flows across the Middle East.
According to a Reuters report, the latest moves by Washington are aimed at easing supply pressures and preventing a further surge in crude prices after the conflict halted tanker movement through one of the world’s most critical oil corridors: the Strait of Hormuz.
Oil Prices Fall After Recent Rally
Oil prices slipped for the first time in six trading sessions as markets reacted to the possibility of US policy measures designed to stabilise prices.
Brent crude futures fell by $1.14, or 1.33 per cent, to $84.27 per barrel, while US West Texas Intermediate (WTI) declined $1.46, or 1.8 per cent, to $79.55 per barrel around 8:30 AM, according to Reuters.
The fall followed a sharp rally in the days immediately after the conflict began. Over the previous four trading sessions, Brent crude had climbed about 18 per cent, while WTI gained roughly 21 per cent, reflecting fears that disruptions in the Middle East could significantly tighten global energy supply.
The Middle East remains one of the most important hubs for global oil production and shipping, and markets have been closely watching the impact of the conflict on energy infrastructure and transport routes.
US Considers Intervention In Futures Market
Citing a senior White House official, the report stated that on Thursday, the US Treasury Department is expected to announce measures to counter rising energy prices resulting from the conflict with Iran.
Among the options being considered is potential action involving the oil futures market, although the official did not provide details about the specific measures under discussion.
If implemented, the move would represent an unusual step by Washington to influence oil prices through financial markets rather than by adjusting physical supply levels.
Governments have historically relied on tools such as strategic petroleum reserve releases or diplomatic engagement with major producers to manage price spikes. Intervention in futures markets would mark a different approach aimed at calming speculative price movements.
Waivers Granted For Russian Crude Purchases
In addition to potential financial market measures, the United States has also taken steps aimed at easing immediate supply constraints.
The US Treasury has issued waivers allowing companies to purchase sanctioned Russian crude that is currently stored on tankers.
The first waivers were granted to Indian refiners, who have responded by buying millions of barrels of Russian crude cargoes for prompt delivery.
The decision marks a reversal from months of pressure on Indian refiners to reduce purchases of Russian oil following Western sanctions imposed after Russia’s invasion of Ukraine.
The waivers are intended to increase available supply in the market and help offset disruptions caused by the conflict in the Middle East.
Middle East Conflict Disrupts Energy Flows
The military confrontation involving the United States, Israel and Iran has had a significant impact on energy infrastructure and transport routes across the region.
The conflict has halted tanker traffic through the Strait of Hormuz, a narrow maritime passage that typically carries roughly one‑fifth of the world’s daily oil supply.
In addition to shipping disruptions, the crisis has also forced the shutdown of some refineries and oil production facilities, while several liquefied natural gas plants in the region have suspended operations.
These disruptions have intensified concerns about supply shortages in global energy markets, particularly for Asian refiners that rely heavily on crude shipments from the Gulf region.
Some refineries have already begun reducing fuel processing due to uncertainty around crude supply.
For now, energy traders are closely watching signals from Washington regarding potential intervention in oil markets and additional policy measures aimed at stabilising supply.
