Global oil prices declined on Friday, heading for their steepest weekly drop in six months, as easing geopolitical signals and policy moves by India helped calm markets.
Prices fell after Donald Trump said progress was being made in talks to end the conflict with Iran and announced a 10-day pause in attacks on Iranian energy infrastructure.
Benchmark Brent crude oil dropped 0.8% to $107.17 per barrel, while West Texas Intermediate fell 1.1% to $93.46. Both benchmarks were down about 4.6% for the week, despite sharp gains in the previous session.
The ongoing conflict involving the United States, Israel and Iran has severely disrupted global energy flows, particularly through the Strait of Hormuz, a key route for nearly 40% of global crude shipments.
In a parallel move, India reduced special excise duties on fuel to ease domestic pressure. Petrol duty was slashed from 13 rupees to 3 rupees per litre, while diesel duty was cut to zero. The decision aims to cushion consumers and offset losses faced by oil marketing companies amid volatile prices.
Economist Madhavi Arora estimated the annual fiscal impact of the tax cuts at around 1.55 trillion rupees, covering up to 40% of fuel-related losses.
India, the world’s third-largest oil importer, relies on overseas sources for over 90% of its crude needs, with a significant share coming from the Middle East. The government, led by Narendra Modi, has assured adequate supplies of fuel, fertilisers and coal despite ongoing disruptions.
Meanwhile, uncertainty persists as the U.S. continues to deploy troops to the region, raising concerns about a potential escalation. Reports suggest Washington is considering strategic moves targeting Iran’s key oil facilities, including Kharg Island.
According to the International Energy Agency, the conflict has already removed around 11 million barrels per day from global supply, making it more severe than past oil shocks.
Analysts warn that while prices may decline if tensions ease, prolonged conflict could push oil prices significantly higher, potentially reaching $200 per barrel.
