US Allows Partial Purchase of Russian Oil to Offset Iran Impact, Oil Prices Fall

Investing.com - On Friday during Asian trading hours, oil prices declined after the U.S. eased some restrictions on purchasing Russian oil to help offset supply shocks caused by the Washington-Israel-Iran conflict.

Shortly after this move, Iran’s new Supreme Leader, Ayatollah Moqtada al-Hassan Khamenei, stated that Tehran would continue to block the Strait of Hormuz—a key oil shipping route—as leverage against the U.S. and Israel.

As of 21:09 Eastern Time (01:09 Beijing Time), May-dated Brent crude futures fell 0.9% to $99.67 per barrel, while U.S. WTI crude futures declined 0.8% to $93.62 per barrel. Both contracts are still set to record strong gains for the week.

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U.S. Allows Purchase of Russian Oil Already at Sea

The U.S. Treasury announced a 30-day exemption on Thursday evening, allowing countries to buy Russian oil that has already left port before March 12.

Treasury Secretary Janet Yellen said the move aims to help stabilize energy markets amid supply shocks from the Iran conflict.

Earlier this week, the U.S. issued some exemptions for Russian oil purchases, allowing India, the world’s third-largest importer, to transport crude from Moscow.

This development comes as the Iran conflict shows little sign of cooling, and the U.S. is also seen as committed to releasing large amounts of oil from its strategic reserves to offset supply disruptions.

Earlier reports this week indicated that the International Energy Agency plans to release a record 400 million barrels from emergency reserves to counter the impact of the Iran conflict.

Iran Conflict Shows No Signs of Ending, Oil Prices Surge This Week

Brent crude and WTI futures have risen 7% to 9% this week, continuing their sharp rally amid ongoing tensions with Iran that show little sign of easing.

Last week, oil prices surged nearly 30%.

On Friday, the conflict entered its 14th consecutive day, with Israel and the U.S. continuing attacks on Iran, while Tehran launched waves of missile and drone strikes in retaliation, targeting oil infrastructure in several Middle Eastern countries.

Tehran has vowed to block the Strait of Hormuz—a critical oil shipping route—as leverage against the U.S. and Israel.

The closure of the Strait of Hormuz and attacks on oil facilities have heightened fears of prolonged disruptions to oil supplies. The Strait is central to these concerns, as about 20% of global oil consumption passes through it.

ANZ Bank analysts wrote in a report: “The conflict has now moved beyond short-term geopolitical shocks into a phase where supply losses are becoming increasingly structural rather than temporary.”

“Price volatility may remain high, but the trend is increasingly upward. Importantly, the longer the disruption lasts, the higher the prices needed to restore market balance.”

Market participants remain cautious about the continued surge in oil prices, worried that high energy costs will fuel inflation and prompt global central banks to adopt more hawkish policies.

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