The impact of Iran's official statements overshadowed the release of reserve plans, and oil prices continued to rise.
Oil prices rose for a second consecutive day after another volatile trading session, as escalating rhetoric about the war in Iran fueled concerns about a prolonged conflict that outweighed the impact of an emergency release of crude reserves. Following a nearly 5% increase on Wednesday, WTI crude oil prices surged by as much as 6.6%, reaching $93.01 per barrel, while Brent crude hit $98 per barrel. Iran informed regional mediators that any ceasefire agreement must include guarantees from the United States that neither the U.S. nor Israel would launch future attacks against Iran. Washington is unlikely to accept these conditions, further diminishing expectations that the war will end soon.
The United States announced plans to release 172 million barrels of crude oil as part of a coordinated global effort to ease energy prices. This move narrowed the gains in oil prices, with the released volume accounting for nearly half of the current U.S. crude reserves. On Wednesday, combined with U.S. reserves, the International Energy Agency agreed to an unprecedented release of 400 million barrels of oil reserves, far exceeding the production cuts seen during the Russia-Ukraine war in 2022, causing oil prices to briefly retreat.
Nevertheless, the strategically vital Strait of Hormuz remains effectively closed to shipping, with markets closely monitoring signs of normalized trade resumption. On Wednesday, three vessels were reportedly struck by suspected airborne objects in the narrow waterway and the Persian Gulf, underscoring the risks faced by maritime traffic.
The near-closure of the Strait of Hormuz, through which one-fifth of the world's oil typically passes, has led major Gulf oil producers to cut output and driven up prices for energy products such as crude oil, natural gas, and diesel. The two-week-long conflict has sparked fears of an inflationary crisis. With global daily crude consumption slightly above 100 million barrels, Gulf producers have so far had to reduce output by approximately 6%.
Robert Rennie, head of commodity research at Westpac, stated: “With no signs of hostilities ending, blockades increasing daily, and the strait effectively closed, we still expect Brent crude prices to enter a new higher range of $90-110 per barrel next week.”
During a speech in Kentucky on Wednesday, Trump reiterated his claim that the war would soon end but also hinted that the U.S. would remain stationed until its objectives are achieved. 'We don’t want to withdraw prematurely, right?' he told the audience.
Editor/Doris
