traded lower on Friday morning after the US temporarily lifted restrictions on the sale of Russian crude to India, granting a waiver for 30 days.
At 9.58 am on Friday, May Brent oil futures were at $84.37, down by 1.22 per cent, and April crude oil futures on WTI (West Texas Intermediate) were at $79.88, down by 1.39 per cent.
March crude oil futures were trading at ₹7331 on during the initial hour of trading on Friday against the previous close of ₹7316, up by 0.21 per cent, and April futures were trading at ₹7172 against the previous close of ₹7217, down by 0.62 per cent.
In a post on X, US Treasury Secretary Scott Bessent said: “President Trump’s energy agenda has resulted in oil and gas production reaching the highest levels ever recorded.
“To enable oil to keep flowing into the global market, the Treasury Department is issuing a temporary 30-day waiver to allow Indian refiners to purchase Russian oil. This deliberately short-term measure will not provide significant financial benefit to the Russian government as it only authorizes transactions involving oil already stranded at sea.
“India is an essential partner of the United States, and we fully anticipate that New Delhi will ramp up purchases of U.S. oil. This stop-gap measure will alleviate pressure caused by Iran’s attempt to take global energy hostage.”
In their Commodities Feed for Friday, Warren Patterson, Head of Commodities Strategy of ING Think, and Ewa Manthey, Commodities Strategist, said prices gave back some of Thursday’s gains in early trading in Asia on Friday. This follows the US’ announcement that it would allow the sale of Russian oil to India for 30 days.
The waiver allows the sale of Russian crude and products to India that were loaded onto vessels before March 5 and remains valid until April 4. This essentially allows floating Russian oil to reach India.
Citing Bloomberg, they said there are at least 9.5 million barrels of Russian oil floating in Asian waters. While this might help put some immediate downward pressure on the market, it is not a game-changer. The only way for prices to come down on a sustained basis is a resumption of oil flows through the Strait of Hormuz.
This action by the US is part of the administration’s plan to try to cap oil prices. The US is also considering tapping the strategic petroleum reserve (SPR), which currently sits at 415 million barrels. If the US government were comfortable drawing down the SPR to the levels seen in 2023, we could expect a release of around 68 million barrels, they said.
ICE Brent settled above $85 a barrel on Thursday, up 4.9 per cent, the highest close since West Asia conflict began. The market remains well supported with few signs of de-escalation in West Asia and a resumption of energy flows in the region. Clearly, with every day that goes by without flows resuming, the oil market will reprice the amount of supply lost, leaving room for prices to move higher, they added.
March natural gas futures were trading at ₹274.40 on MCX during the initial hour of trading on Friday against the previous close of ₹273.60, up by 0.29 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), March cottonseed oilcake contracts were trading at ₹3337 in the initial hour of trading on Friday against the previous close of ₹3329, up by 0.24 per cent.
April dhaniya futures were trading at ₹11600 on NCDEX in the initial hour of trading on Friday against the previous close of ₹11682, down by 0.70 per cent.