- Oil prices rose sharply this week due to Middle East conflict disrupting global supply routes
- Brent crude surged 15% but fell below $84 after Trump hinted at market cooling measures
- US issued a license allowing limited Russian oil sales to India until April 4
Oil prices are on track for their strongest weekly rally since 2022 as escalating conflict in the Middle East rattles global energy markets and disrupts shipping routes critical to global supply.
Brent crude has surged about 15% over the week, but prices slipped back below $84 a barrel on Friday after President Donald Trump hinted at “imminent action” to cool the oil market and the US Treasury relaxed restrictions on India's ability to purchase Russian crude. West Texas Intermediate, meanwhile, was trading near $79 as it too retreated from earlier highs.
Additionally, the US government has issued a general license permitting limited Russian oil sales to India as the worsening conflict in the Persian Gulf disrupts supplies. Under this authorization, Indian buyers are allowed to complete transactions for Russian crude and petroleum products loaded onto vessels before March 5, provided the cargo is delivered to India and purchased by an Indian entity. The license is strictly time‑bound and will expire on April 4 at 12:01 a.m. Washington time.
ALSO READ: US Issues License To Allow Some Russian Oil Sales To India
Strait of Hormuz Disruption
One of the most immediate impacts has been a dramatic slowdown in shipping through the Strait of Hormuz, a vital energy corridor that typically carries around 20% of global oil flows. Tanker traffic through the passage has nearly stalled as security risks rise, choking off supplies and forcing some producers to shut in output.
Energy infrastructure has also faced direct disruptions, with reports of refineries and tankers being targeted, adding to market anxiety over supply stability.
Analysts warn that a prolonged disruption could push oil prices significantly higher. Goldman Sachs said an extended shutdown of the Strait of Hormuz could drive prices well beyond current levels. The bank's base case still assumes shipping flows will gradually recover, with Brent averaging about $76 a barrel in the second quarter.
Governments Consider Emergency Measures
Governments are weighing emergency steps to stabilize markets. US Interior Secretary Doug Burgum said officials are considering several options to address rising oil and gasoline prices. Measures under discussion include a potential release from the Strategic Petroleum Reserve, the country's emergency crude stockpile stored in underground caverns.
So far, the administration has not announced a decision.
Meanwhile, Asian economies are also preparing contingency measures. China has instructed major refiners to halt exports of diesel and gasoline to prioritize domestic supply, while Japanese refiners have asked their government to release oil from strategic reserves.
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