Saudi Arabia's crude oil experiences its biggest increase in two years, Asian central banks rapidly shift to rate hikes, Trump: Will take all measures to suppress oil prices

Saudi Aramco’s official April prices for Arab Light crude oil shipped to Asia saw the largest increase since August 2022, with a premium of $2.50 per barrel over Oman/Dubai average. In comparison, March prices were flat against Oman/Dubai, and February’s premium was only $0.30 per barrel.

Additionally, Saudi Arabia set the April export price of Arab Light to Northwest Europe at a premium of $2.85 per barrel over London Brent futures; for the US market, the price was set at a premium of $4.60 per barrel over Argus sulfur crude.

Asian Central Bank Policy Shift: India and the Philippines Switch to “Hike”

As traders bet heavily that the Iran conflict will trigger oil price shocks, central banks in developing Asian countries are changing their policy outlooks. Overnight Index Swaps (OIS) show significant shifts in interest rate expectations:

• India, Philippines: The most dramatic change, now expected to hike rather than cut rates
• Thailand, Indonesia: Still expected to cut, but the probability is rapidly decreasing
• Malaysia: Investors are preparing for higher rates; the economy is among the fastest-growing in the region

OCBC Bank’s research head Selena Ling said on Friday, “Given the ongoing Iran conflict, Asian central banks will remain highly sensitive to oil price movements and may closely monitor whether short-term monetary easing space has disappeared.”

Indonesia and the Philippines saw accelerated February CPI increases, with further rises expected. Both countries rely heavily on imports for fuel, and a weakening local currency has further increased import costs. Even Thailand, where inflation has been negative for nearly a year, warned that rising food and fuel prices due to Middle East conflicts could push inflation back up starting this month.

Bessent: 30-Day Exemption Allows India to Buy Russian Oil, Eases Iran “Hostage” Energy Pressure

U.S. Treasury Secretary Scott Bessent posted on X that President Trump’s energy agenda has pushed oil and natural gas production to record highs.

To ensure continued oil flow into global markets, the U.S. Treasury issued a 30-day temporary exemption allowing Indian refiners to purchase Russian oil. Bessent emphasized that this “deliberately short-term measure” would not bring significant economic benefits to the Russian government, as it only authorizes transactions related to “oil already stranded at sea.”

Bessent stated that India is an important U.S. partner and expects the Indian government to increase U.S. oil purchases. He described this transitional measure as “a way to ease the pressure caused by Iran trying to hold global energy hostage.”

Bloomberg: Trump Administration “Considering All Options” to Lower Oil Prices

Beyond the exemption for India to buy Russian oil, the Trump administration is evaluating additional measures to suppress oil prices. U.S. Secretary of the Interior Doug Burgum told Bloomberg, “All options are on the table,” including short-term actions with immediate effects and longer-term, more complex strategies.

Current options include:

• Releasing Strategic Petroleum Reserve (SPR): Possibly coordinated with other countries for maximum impact, but not yet activated
• Waiving fuel blending requirements: Relaxing environmental blending rules to increase supply
• Direct federal trading of crude oil futures: An unprecedented move—given the U.S. is one of the largest oil producers and consumers, it has a unique position, though details remain unclear
• DFC war insurance + naval escort: Announced and led by Treasury Secretary Bessent and Energy Secretary Wright, details are still being developed

Burgum said, “The U.S. has the opportunity to establish some normal order through federal action. We can take risks to ensure our allies have sufficient supply because only we have the financial strength and naval power to do so.”

Since the U.S. and Israel launched attacks on Iran, oil prices have risen about 18%, with gasoline reaching nearly a year-high. In an interview with Bloomberg, Burgum just finished a two-day meeting in Venezuela with the interim government to discuss oil and mining investments—following the U.S. assistance in arresting former President Maduro in January. Behind the effort to push down oil prices are also political pressures ahead of the November midterm elections.