Brent crude price breaches $100 mark again as Iran strikes ships in Gulf region; IEA to release 400 mn barrels oil to combat spike

US benchmark crude oil, meanwhile, jumped to about $95 a barrel.

Iran on Wednesday had said the world should be ready for oil at $200 a barrel as its forces continue to hit merchant ships on the strait, Reuters quoted.

The spike was seen hours after two foreign oil tankers were reportedly attacked in Iraq’s port of al-Faw this morning. The strike came hours after a Thai cargo vessel was hit in the Strait of Hormuz, and drones struck fuel tanks in Oman’s port of Salalah, according to Al Jazeera.

Projectiles also struck three vessels in Gulf waters, port, maritime security and risk firms have said, Reuters quoted. Meanwhile, Kuwait, Qatar, UAE and Saudi Arabia continue to intercept more Iranian missiles and drones.

The latest attack on shipping in the Gulf region takes the total number of ships struck to at least 16, with the ongoing US-Israeli war with Iran showing so signs of slowing.

IEA agrees to release record 400 million barrels of oil

The International Energy Agency (IEA) Wednesday agreed to release a record 400 million barrels of oil from strategic stockpiles to combat the spike in global crude prices amid the Middle East war, AP reported.

All 32 countries have backed the move, with the United States taking a lead role by contributing 172 million barrels, US Energy Secretary Chris Wright said. “President Trump promised to protect America’s energy security by managing the Strategic Petroleum Reserve responsibly and this action demonstrates his commitment to that promise,” he said in a press ⁠release.

This is a larger stock, as compared to the 182.7 million barrels released in 2022 by the IEA’s 32 member countries in response to Russia’s full-scale invasion of Ukraine, the report noted.

However, the 400 million barrel release would cover only about 20 days of supply lost due ‌to the disruptions along the Strait of Hormuz, and will take weeks or months to reach markets, Reuters report stated.

IEA members hold emergency stockpiles of more than 1.2 billion barrels, with another 600 million in industry stocks held under government obligation, according to data quoted by the news agency.

India’s reaction

India, a major importer of the Middle Eastern oil, welcomed the IEA’s announcement on Wednesday.

The country’s Ministry of Petroleum and Natural Gas stated, “India stands ready to take appropriate measures, as necessary, to support global market stability in alignment with the efforts of the International Energy Agency.”

‘Japan to act first’

G7 member Japan, ​which relies heavily ​on Middle Eastern oil, said it planned to release around 80 million barrels from its private and national oil reserves as its contribution, Reuters reported.

In a broadcast statement, Japan Prime Minister ⁠Sanae Takaichi said, “Rather than wait for formal IEA approval of a coordinated international reserve release, Japan will act first to ease global energy ​market supply and demand, releasing reserves as early as the 16th of this month.”