Oil prices experienced a decline following the announcement by US President Donald Trump regarding the extension of the deadline for action against Iran’s energy sector. This development has offered temporary relief to financial markets, yet it simultaneously prolongs the uncertainty surrounding the potential evolution of the conflict into April. Brent crude experienced a decline of up to 2%, dropping beneath $106 per barrel on Friday, following a nearly 6% increase in the prior session, while West Texas Intermediate remained around $93 a barrel. Back home, crude oil prices on the Multi Commodity Exchange experienced a comparable decline. MCX crude oil prices experienced a decline of 1.31%, settling at Rs 8,879 per barrel. Trump indicated that while Tehran requested a seven-day window, he provided a 10-day extension, thereby adjusting the revised deadline to April 6.

The extension facilitates further diplomatic negotiations and allows the US to enhance its military presence in the region. This deployment already encompasses Marine Expeditionary Units and personnel from the Army’s 82nd Airborne Division, as reported. In a separate report, source indicated that the Pentagon is contemplating the deployment of up to 10,000 additional ground troops. Iran’s foreign minister has indicated that a U.S. proposal is under consideration but has ruled out direct negotiations, while President Trump has continued to urge Tehran to take a more serious approach toward a deal. Ongoing mixed signals from both sides indicate that any resolution is expected to unfold gradually, thereby maintaining elevated market volatility in the near term,” stated Kaynat Chainwala.

Meanwhile, Brent crude is poised for a historic monthly increase in March, as the tensions involving the US, Israel, and Iran have unsettled the oil-rich Middle East. The situation in Tehran has led to a near-total shutdown of the Strait of Hormuz, resulting in substantial disruptions to vital energy supplies for the global economy. Iran stated on Thursday, as reported, that it is anticipating a response after dismissing a 15-point US proposal aimed at concluding the war and presenting its own conditions. These encompass acknowledgment of Tehran’s authority over the Strait of Hormuz, an essential passage connecting the Persian Gulf to international markets. Prior to the onset of the conflict in late February, the critical waterway represented approximately one-fifth of global oil shipments.

In the context of the ongoing stalemate, there has been a modest increase in the number of vessels associated with Iran — primarily bulk carriers and LPG ships — seeking to navigate the passage over the past day. Regarding the outlook for crude oil prices, Chainwala noted that Brent crude is presently maintaining a position above $107 per barrel, which sustains the Brent–WTI spread at an elevated level exceeding $10 per barrel. This figure is considerably higher than the usual low single-digit range, indicating a pronounced premium on seaborne crude. “Overall, crude oil markets remain highly sensitive to geopolitical developments, with persistent volatility driven by uncertainty around U.S.–Iran relations and the absence of a clear de-escalation pathway,” she stated.