LONDON: On Thursday, oil prices experienced a significant increase as Iran intensified its attacks on oil and transport facilities throughout the Middle East. This action has sparked concerns about the potential for a protracted conflict and disruptions to oil movements through the Strait of Hormuz.
Brent futures increased by $4.89, or 5.32 percent, to $96.87 per barrel at 2:24 p.m. West Texas Intermediate crude in the United States was up $4.26, or 4.88 percent, to $91.51 in the early hours of Saudi time, following its recent peak of $100 per barrel.
Brent reached its highest level of $119.50 per barrel on Monday, which was the highest since mid-2022. Subsequently, it declined following remarks made by US President Donald Trump that the Iran conflict may conclude rapidly.
The International Energy Agency announced on Thursday that the Middle East conflict is resulting in the most significant disruption to global oil supplies in history. This announcement was made a day after the agency authorized the release of a record-breaking 400 million barrels of oil from strategic stockpiles.
According to the agency’s most recent monthly oil market report, the conflict has reduced total oil production by at least 10 million barrels per day, equivalent to nearly 10% of global demand.
According to PVM analyst John Evans, the market pricing is treating the IEA release with a grain of salt due to the absence of a clear timeline. Evans further stated that the release is expected to last 90 days, translating to an estimated 4.5 million barrels per day.
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