Oil rises again despite record reserve release as Iran attacks continue

Oil prices climbed on Thursday as renewed attacks on energy and shipping infrastructure across the Middle East deepened concerns about disruptions to global crude supplies, overshadowing an emergency release of oil reserves by the International Energy Agency.

Benchmark crude surged after Iran-linked attacks targeted oil and transport facilities across the region, raising fears that flows through the strategic Strait of Hormuz could remain disrupted for an extended period.

Brent crude futures rose $4.47, or 4.86%, to $96.45 a barrel by 0733 GMT after briefly touching $100 earlier in the session. U.S. benchmark West Texas Intermediate climbed $4.05, or 4.64%, to $91.30.

Brent had earlier surged to $119.50 a barrel on Monday — its highest level since mid-2022 — before retreating after Donald Trump said the conflict with Iran could end soon.

But markets turned volatile again as hostilities continued.

“Get ready for oil to be $200 a barrel, because the oil price depends on regional security, which you have destabilised,” a spokesperson for Iran’s military command said Wednesday in remarks directed at the United States.

Analysts said the market remained focused on the risks to shipping in the Gulf, particularly through the Strait of Hormuz, a vital passage for roughly a fifth of the world’s oil trade.

“There are no signs of a de-escalation in the Gulf and as a result, there is no end in sight to the disruptions to oil flows through the Strait of Hormuz,” analysts at ING told Reuters.

“The only way to see oil prices trade lower on a sustained basis is by getting oil flowing through the Strait of Hormuz. Failing to do so means that the market highs are still ahead of us.”

Security concerns intensified after two foreign tankers carrying Iraqi fuel oil were attacked in Iraqi territorial waters and caught fire, according to Farhan al-Fartousi, director general of the country’s ports authority.

Preliminary findings from Iraqi security officials suggested explosive-laden boats from Iran were used in the attacks.

The escalating tensions have rattled energy markets despite an unprecedented move by the International Energy Agency to release oil from emergency reserves.

The agency said it would make 400 million barrels of oil available to help stabilize global markets following supply disruptions triggered by the conflict.

The United States is contributing the largest share — 172 million barrels from its Strategic Petroleum Reserve.

Still, analysts warned the move could only provide short-term relief.

“The IEA’s release of oil reserves may be only a temporary solution,” said Tina Teng, a market strategist at Moomoo ANZ. “Disruptions to oil shipments through the Strait of Hormuz and a major production halt in some Middle Eastern countries could cause a long-term supply crunch.”

Meanwhile, China has reportedly ordered a temporary halt to refined fuel exports in March to guard against a possible domestic fuel shortage triggered by the escalating conflict.

Speaking in Kentucky, Trump said the coordinated reserve release by 32 countries would help bring down prices.

“Prices are coming down very substantially,” he said. “Oil will be coming down. That’s just a matter of war that happens.”