Policy Options Under Review
These discussions follow earlier plans for insurance guarantees and naval escorts to support safe passage for oil tankers and other vessels through the Strait of Hormuz. The US Treasury announced waivers allowing India to buy Russian oil for 30 days, running until 4 April 2026. The overall impact on global oil markets, including Asia, was described as uncertain. The article was produced using an artificial intelligence tool and reviewed by an editor. We are seeing Brent oil prices ease to around $85 a barrel as the US administration signals it might use several policy tools to manage fuel costs during the Iran conflict. This government pressure is creating significant uncertainty, which traders must now factor into their strategies. The market is nervous about potential sudden moves, especially over weekends.Market Volatility And Positioning
The options being discussed range from releasing oil from the Strategic Petroleum Reserve (SPR) to waiving fuel-blending rules and even directly intervening in the futures market. After seeing national average gasoline prices tick up to $4.15 last week, the political will to act is clearly growing. This makes any long positions feel particularly risky right now. This threat of intervention has pushed the CBOE Crude Oil Volatility Index (OVX) up nearly 15% in two weeks, making options contracts more expensive. We all remember the large-scale SPR releases during the 2025 supply crunch, which temporarily capped prices but did little to solve underlying issues. With the SPR currently holding a historically low 375 million barrels, another large release would be a powerful but perhaps limited tool. Adding another layer, the US Treasury has given India a temporary waiver to purchase Russian oil until April 4th. This suggests the administration is trying to balance multiple pressures by ensuring global supply is not overly constricted. This pragmatic move further dampens the bullish sentiment that would normally dominate during a major conflict in the Middle East. Given these conflicting signals, we believe caution is the best approach for the coming weeks. The clear bearish risk from a policy announcement is fighting the bullish risk from geopolitical escalation. This environment makes it difficult to hold directional bets, suggesting strategies that profit from high volatility or hedge against a sharp downturn could be more prudent. Create your live VT Markets account and start trading now.
Start trading now – Click here to create your real VT Markets account
