Oil prices fell for the first time in six sessions during Friday's Asian trade as the United States considered intervening in the oil futures market to limit price increases and granted waivers allowing Indian refiners to purchase Russian crude to help ease supply shortages triggered by the Middle East conflict.
By 2:45 pm AEDT (3:45 am GMT), Brent crude futures were down $0.92, or 1%, at US$84.54 per barrel, while U.S. West Texas Intermediate crude slipped $0.95, or 1.2%, to $80.06.
The decline followed a sharp rally earlier in the week, driven by escalating hostilities involving Iran and concerns about disruptions to global energy flows through the Strait of Hormuz.
The United States and Israel launched military strikes against Iran on 28 February, triggering a conflict that has halted tanker traffic through the strategic waterway.
The Strait of Hormuz typically carries around one-fifth of the world’s daily oil supply.
The fighting has also forced the shutdown of refineries and oil production facilities, while liquefied natural gas plants across key Middle East energy-producing regions have suspended operations.
Despite Friday’s pullback, crude prices have still surged this week. Brent has risen 15.9% so far during the period, while WTI has climbed 19.2%.
Analysts at ANZ commented in a note to clients: “The disruptions to supplies in the Middle East are also pushing traders to pursue more U.S. oil. This saw WTI futures rally faster than Brent crude, with the Brent-WTI spread tightening to $3.5/bbl from $6.84bbl earlier this week.”
Meanwhile, the White House signalled it may take further steps to contain rising energy prices.
A senior White House official told Reuters on Thursday that the U.S. Treasury Department is expected to introduce measures aimed at combating the surge in oil prices linked to the conflict with Iran.
Those measures could potentially involve intervention in the oil futures market, although no specific details were provided.
Such a move would represent an unusual attempt by Washington to influence energy prices through financial markets rather than by releasing physical oil supplies.
At the same time, U.S. authorities have taken steps to increase physical supply in global markets. The Treasury Department granted waivers allowing companies to purchase Russian crude oil that had been sitting in storage on tankers despite sanctions.
The first waivers were issued to Indian refiners, who have responded by purchasing millions of barrels of Russian crude cargoes for near-term delivery, according to market sources.
The purchases mark a reversal from recent months, during which Western pressure had pushed some buyers to limit or suspend purchases of Russian oil.
The waivers are intended to help offset supply disruptions affecting refineries, particularly across Asia, where some facilities have already begun scaling back fuel processing due to limited access to crude.
