Crude Oil Prices Climb Above $90 as Strait of Hormuz Disruptions Offset Record Reserve Release
Oil Prices Extend Gains in Early Thursday Trade
Crude oil prices continued their upward trend on Thursday, March 12, with US crude, also known as West Texas Intermediate, rising back above the $90 per barrel level in early trading. The increase follows a sharp rally on Wednesday, when prices surged by around 5%.The gains have persisted despite efforts by global energy authorities to stabilize the market through the release of emergency oil reserves.
IEA Announces Record Release of Strategic Oil Reserves
The International Energy Agency (IEA) has agreed to release 400 million barrels of oil from its emergency reserves, marking the largest such release on record. This exceeds the nearly 200 million barrels that were released in 2022 to ease price pressures during the Russia Ukraine war.However, the IEA has not specified when the additional supply will reach global markets. Executive Director Fatih Birol noted that stability in oil markets will depend heavily on the resumption of tanker traffic through the Strait of Hormuz.
Strait of Hormuz Disruptions Continue to Impact Global Supply
Most refined petroleum products, including jet fuel, pass through the Strait of Hormuz. Tanker traffic through the strategic waterway has largely stopped, which has intensified concerns over supply disruptions.Birol acknowledged that without the safe movement of vessels through the strait, releasing reserves alone may not fully address supply challenges.
War Concerns Add to Market Uncertainty
Geopolitical tensions remain a key driver of oil market volatility. Iran has reportedly told regional intermediaries that a ceasefire would only be possible if the United States guarantees that neither it nor Israel will launch future attacks against the country, recognizes Iran’s rights, and provides reparations.However, Bloomberg reported that Washington is unlikely to accept these conditions, adding further uncertainty to the situation.
US Strategic Petroleum Reserve Could Also Be Used
US President Donald Trump welcomed the IEA’s decision and indicated that the United States could also release oil from its Strategic Petroleum Reserve to support the market.According to the plan, the US would release 172 million barrels of oil from the reserve, which currently holds about 415 million barrels, slightly more than half of its total storage capacity.
Attacks on Vessels Raise Safety Concerns
Security concerns in the region have intensified following continued attacks on three vessels operating in the Strait of Hormuz and the Persian Gulf. These incidents have increased the risks for ships navigating or attempting to pass through the area, contributing further to the uncertainty surrounding global oil supply.Disclaimer: Due care and diligence have been taken in compiling and presenting news and market-related content. However, errors or omissions may arise despite such efforts.
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