Oil prices rose sharply during Asian trading on Thursday, briefly moving back above the key $100 per barrel level as concerns grew about energy supply disruptions linked to the escalating conflict between the United States, Israel, and Iran.
Although crude prices later trimmed part of their gains due to discussions about potential emergency stockpile releases by major economies, the overall trend for the day remained positive.
By 01:03 ET (05:03 GMT), Brent crude futures had risen 7.6% to $99.00 per barrel, while West Texas Intermediate crude futures increased 6.8% to $91.93 per barrel. Earlier in the session, Brent briefly climbed to a high of $101.59 per barrel.
Tanker attacks and port evacuation increase supply concerns
Recent reports indicated that two international oil tankers were attacked in the northern Persian Gulf, near the waters of Iraq and Kuwait. Videos circulating online showed the vessels engulfed in flames, with Iraqi media suggesting that the strikes were carried out by Iran.
At the same time, Bloomberg reported that Oman had evacuated ships from a major oil export facility at Mina Al Fahal as a precautionary measure following a series of attacks on vessels operating in the region.
Additional concerns emerged after Reuters reported that China had immediately halted exports of refined fuel in March in an effort to prevent potential domestic shortages amid the escalating Iran conflict.
These developments suggest that the impact of the conflict is spreading beyond the Strait of Hormuz, a critical shipping route through which roughly 20% of the world’s oil supply passes. Iran was reportedly blocking traffic through the strait earlier in the week, raising concerns about a significant disruption to global oil flows.
Markets assess duration of supply disruptions
Analysts at ANZ warned that markets may be underestimating the potential duration and severity of disruptions caused by the conflict.
According to the bank, once a conflict moves beyond its initial shock phase, oil markets typically shift their focus from short-term uncertainty to the long-term sustainability of supply.
In that scenario, the key question becomes how long oil producers can maintain output under increasingly difficult operating conditions.
Strategic reserve releases limit further price gains
Despite the strong rally, oil prices were prevented from reaching even higher levels due to plans by several countries to release emergency reserves.
The International Energy Agency is reportedly preparing to release a record 400 million barrels of oil from global strategic stockpiles to stabilize the market.
Meanwhile, Donald Trump, President of the United States, announced that the country will release 172 million barrels from the U.S. Strategic Petroleum Reserve in an effort to reduce the energy shock caused by the Iran conflict.
The war has shown few signs of easing despite repeated statements from U.S. officials suggesting that the conflict could soon end. Earlier in the week, oil prices had surged to nearly $120 per barrel amid heightened supply fears.
Separately, data released on Wednesday showed that U.S. crude inventories increased by 3.8 million barrels during the previous week, exceeding market expectations.
