PERTH: Oil fell for the first time in six days as the U.S. government is considering potentially intervening in the futures market to blunt rising prices and has given waivers to Indian refiners to buy Russian crude to ease supply constraints from the Middle East war.
Brent crude futures were down $1.14, or 1.33%, to $84.27 per barrel and West Texas Intermediate down $1.46, or 1.8%, to $79.55 as of 0251 GMT.
The U.S. has taken the steps to ease the surge in prices after it, along with ally Israel, started a military conflict with Iran on February 28 that has halted tankers from moving through the Strait of Hormuz, which typically carries roughly one-fifth of the world's daily oil supply, shut refineries and oil output and shuttered liquefied natural gas plants in the key Middle East energy-producing region.
In the previous four trading sessions since the war started, Brent has climbed 18% while WTI has gained 21%.
A senior White House official said on Thursday, the U.S. Treasury Department is expected to announce measures to combat rising energy prices from the Iran conflict, including potential action involving the oil futures market, without providing any details.
The potential move would mark an unusual attempt by Washington to influence energy prices through financial markets rather than physical oil supplies.
To ease physical supply constraints, which have caused refineries, especially in Asia, to start reducing their fuel processing, the Treasury also granted waivers for companies to start buying sanctioned Russian oil stored on tankers.
The first waivers were given to Indian refiners who have responded by buying millions of barrels of prompt Russian crude oil cargoes, sources said, reversing months of pressure on them to halt the purchases.
Analysts cautioned that the recent gain in prices is relatively subdued compared to other price shocks, particularly after the full-scale Russian invasion of Ukraine in 2022, when prices rose above $100 a barrel.
"While panic around surging oil prices appears to be spreading beyond market circles, it’s important to put this move into perspective: despite crude’s almost 20% surge this month, the price is currently just $3.40 above its average over the last four years,” IG analyst Tony Sycomore wrote in a note. - Reuters
