Oil price jumps despite deal to release record amount of reserves

Global oil prices climbed sharply and stock markets slipped after additional attacks on cargo vessels in the Gulf heightened fears about energy supply disruptions.

Benchmark Brent crude briefly rose more than 9% on Thursday, pushing prices back above $100 per barrel before easing slightly to about $97.90 later in the session.

The surge came despite an announcement by the International Energy Agency (IEA) that it would release a record 400 million barrels of oil from strategic reserves in an effort to stabilise markets and limit the economic fallout from the conflict involving the United States, Israel and Iran.

Market anxiety intensified after reports that three more cargo vessels had been struck in the region, adding to concerns that shipping routes critical to global energy supplies could remain under threat.

Investors fear the global economic recovery could be delayed if attacks on shipping and energy infrastructure continue around the Strait of Hormuz, one of the world’s most important maritime routes for oil and gas.

The narrow waterway serves as a major transit corridor for crude oil shipments and liquefied natural gas exports. Refineries in surrounding countries also produce large quantities of jet fuel and diesel that are distributed worldwide.

Because of security concerns, the strait is now effectively closed to many vessels as shipping companies weigh the risks of operating in the area.

A spokesperson for the Islamic Revolutionary Guard Corps warned that ships linked to the United States, Israel or their allies could be targeted.

“You will not be able to artificially lower the price of oil. Expect oil at $200 per barrel,” the spokesperson said.

“The price of oil depends on regional security, and you are the main source of insecurity in the region.”

Global stock markets reacted negatively to the escalating situation. In Europe, the FTSE 100 in London fell by 0.6% in early trading, while Germany’s DAX, France’s CAC 40 and Spain’s IBEX 35 also declined.

In Asia, Japan’s Nikkei 225 ended the day about 1% lower.

The IEA said the conflict in the Middle East is “creating the largest supply disruption in the history of the global oil market”.

According to the agency, several major producers — including Iraq, Qatar, Kuwait, the United Arab Emirates and Saudi Arabia — have collectively reduced oil output by at least 10 million barrels per day.

The IEA warned that restoring production could take weeks or even months depending on how quickly workers, equipment and other resources can safely return to affected energy facilities.

All 32 member countries of the agency have agreed to the unprecedented release of oil reserves in a coordinated effort to ease supply shortages and bring down rising prices.