Oil Prices Rise Nearly 4% as Strait of Hormuz Attacks Increase Supply Concerns
Global oil prices climbed sharply on Wednesday after new attacks on vessels in the Strait of Hormuz heightened fears of supply disruptions. Analysts also warned that the plan by the International Energy Agency (IEA) to release emergency oil reserves may not be enough to calm markets.
Oil Prices Jump on Escalating Middle East Tensions
By 11:17 a.m. EDT (15:17 GMT), Brent crude futures had risen $3.40, or 3.9%, to $91.20 per barrel, while U.S. West Texas Intermediate (WTI) increased $3.25, also 3.9%, to $86.70 per barrel.
The surge in prices reflects growing concerns that disruptions to oil shipments in the Middle East could significantly tighten global supply.
IEA Proposes Record Strategic Oil Release
The International Energy Agency recently proposed a release of 400 million barrels of oil from strategic reserves, the largest coordinated release in its history. The plan aims to stabilize energy markets after oil prices surged roughly 25% since the start of the U.S.-Israel conflict with Iran.
However, the IEA has not yet specified the timeline for releasing these reserves.
Although the proposed volume exceeds the 182 million barrels released in 2022 following the Russian invasion of Ukraine, analysts say it may still fall short of offsetting supply losses if the Middle East conflict continues.
Strategic Release May Have Limited Impact
According to analysts at Macquarie, the proposed release is equivalent to about four days of global oil production and roughly 16 days of crude oil shipments passing through the Persian Gulf.
In a research note, the analysts concluded that the release alone is unlikely to significantly reduce supply concerns in global energy markets.
Ship Attacks Disrupt Global Oil Trade
Maritime security firms reported that three additional vessels were struck by projectiles in the Strait of Hormuz, bringing the total number of ships attacked in the region to at least 14 since the conflict began.
Shipping traffic through the narrow waterway has slowed dramatically since the United States and Israel launched military strikes on Iran on February 28, effectively disrupting the flow of around 20% of the world’s oil supply.
U.S. Navy Declines Tanker Escort Requests
Donald Trump has repeatedly stated that the United States could escort oil tankers through the Strait of Hormuz if necessary.
However, according to reports, the U.S. Navy has declined requests from shipping companies for military escorts, citing the high risk of further attacks in the region.
U.S. Inventory Data Fails to Ease Market Fears
Oil markets also largely ignored a new report from the U.S. Energy Information Administration, which showed U.S. crude inventories increased more than expected last week.
At the same time, gasoline and distillate fuel stocks—including diesel and jet fuel—fell more than analysts had anticipated, highlighting strong fuel demand.
Gulf Energy Infrastructure Disruptions Continue
Supply concerns intensified after Abu Dhabi National Oil Company shut down its Ruwais refinery following a fire triggered by a drone strike, according to industry sources.
This marks the latest disruption to energy infrastructure linked to the ongoing conflict.
Meanwhile, **Saudi Arabia, the world’s largest oil exporter, is increasing shipments through the Red Sea port of Yanbu in an attempt to maintain export flows.
However, shipping data shows that these shipments remain far below the levels needed to offset the sharp drop in supply from the Strait of Hormuz.
Global Oil Supply Faces Major Shortfall
Energy consultancy Wood Mackenzie estimates that the war has already reduced Gulf oil and petroleum product supply by around 15 million barrels per day.
If disruptions continue, analysts warn that crude oil prices could climb as high as $150 per barrel.
Analysts at Morgan Stanley also cautioned that even if the conflict ends quickly, energy markets could still face several weeks of disruption.
