Global markets reacted sharply as crude prices climbed despite a historic emergency oil reserve release, highlighting investor fears that tensions in the Middle East could disrupt key shipping routes.
Fuel pump nozzles are seen at a petrol station (Photo by engin akyurt on Unsplash)
Global oil prices climbed steeply on Thursday as traders reacted to fears that the ongoing tensions in the Middle East could disrupt crude supplies.
The surge came even as the International Energy Agency (IEA) announced a massive release of emergency oil reserves in an effort to stabilise markets. Despite the move, investors remained worried that shipments from the region could still face disruption.
Advertisement
Benchmark crude prices rose more than 8 per cent during the day. West Texas Intermediate (WTI) gained about 8.8 per cent to trade close to $95 a barrel, while Brent crude jumped roughly 8.9 per cent, briefly touching the $100 mark.
Advertisement
The sharp rise reflects growing anxiety among traders that any disruption to shipping routes in the Middle East could tighten global oil supplies.
In a coordinated effort to ease pressure on markets, the IEA said on Wednesday that its 32 member nations would collectively release around 400 million barrels of crude oil from their strategic reserves.
The step represents the biggest joint release of emergency oil stocks since the agency was created following the 1973 oil crisis.
Separately, the US Department of Energy announced plans to release 172 million barrels from the country’s Strategic Petroleum Reserve. US Energy Secretary Chris Wright said shipments could begin as early as next week and would likely take about 120 days to complete.
However, oil prices continued to move higher, with traders worried that these emergency measures might not be enough if shipments through the Strait of Hormuz are disrupted. The narrow waterway is one of the most important routes for global oil transport.
Rising crude prices also weighed on financial markets. Indian equities opened sharply lower on Thursday, while Asian markets slipped after reports of additional vessel strikes in the Strait of Hormuz and Iraqi waters.
The developments have intensified fears of higher inflation and rising borrowing costs across the global economy.
Advertisement
