Global oil prices saw a significant surge on Thursday due to concerns over supply disruptions in the Middle East. Despite the International Energy Agency’s announcement of a large emergency oil reserve release, benchmark crude prices rose over 8%. West Texas Intermediate traded near $95 per barrel, while Brent crude hovered around $100 per barrel, climbing about 8.9%. Traders are worried that the conflict in the Middle East could lead to global supply tightening.
The International Energy Agency disclosed that its 32 member countries plan to release a total of 400 million barrels of crude oil from their strategic reserves, marking the largest coordinated drawdown since the agency’s establishment post the 1973 Oil Crisis. Additionally, the United States Department of Energy revealed its decision to release 172 million barrels from the country’s Strategic Petroleum Reserve.
Despite these efforts to boost supply, oil markets continued to rise as traders fear the emergency releases may not be sufficient to offset potential disruptions in oil flows through the critical Strait of Hormuz. The surge in oil prices also impacted Indian equity markets negatively, leading to a sharp decline in the opening. Asian shares followed suit, dropping amid reports of vessel strikes in the Strait of Hormuz and Iraqi waters, causing inflation concerns and increasing borrowing costs globally.
