Oil Prices Surge Past $100 Despite Massive Reserve Release
Global oil prices climbed sharply on Thursday, surpassing $100 per barrel, despite a coordinated decision by major economies to release a record volume of oil from emergency reserves in an attempt to stabilise markets amid escalating tensions involving Iran.
Benchmark Brent Crude rose nearly 9 percent in Asian trading, climbing above the $100-per-barrel mark even after all 32 member countries of the International Energy Agency (IEA) agreed to release 400 million barrels of oil from strategic reserves.
The emergency measure represents the largest coordinated release of oil reserves in history, more than double the previous record set following the Russian invasion of Ukraine in 2022.
Strait of Hormuz Tensions Drive Market Fears
The surge in prices comes amid heightened geopolitical tensions in the Middle East, particularly around the strategically important Strait of Hormuz, a narrow shipping route through which roughly one-fifth of the world’s oil supply normally passes.
Authorities in Iran have warned that oil prices could climb significantly higher if the conflict intensifies. A spokesperson for the Islamic Revolutionary Guard Corps (IRGC) said vessels linked to the United States, Israel and their allies could become targets in the waterway.
“You will not be able to artificially lower the price of oil. Expect oil at $200 per barrel,” the spokesperson warned, arguing that regional security conditions will ultimately determine oil prices.
The tensions escalated after the United States and Israel launched airstrikes on Iran on February 28, raising fears of disruptions to global energy supplies.
Reserve Release Seen as Temporary Buffer
While the coordinated reserve release by the IEA is expected to provide some relief to global markets, analysts say the move may only offer a short-term buffer if geopolitical tensions persist.
According to energy analyst Martin Ma of the Singapore Institute of Technology, oil prices are likely to remain elevated as long as supply risks remain.
He explained that the latest price surge suggests traders expect prolonged disruptions to global oil shipments, particularly if the situation in the Strait of Hormuz worsens.
Earlier this week, Brent crude briefly surged to nearly $120 per barrel, highlighting the extreme volatility currently affecting global energy markets.
Global Impact Already Emerging
The sharp increase in oil prices is already translating into higher fuel costs around the world.
In the United States, the average price of petrol rose above $3.50 per gallon, according to data from the American Automobile Association.
Several Asian countries, which rely heavily on Middle Eastern energy supplies, are also feeling the impact.
Long queues have been reported at petrol stations across the Philippines, Thailand and Vietnam as motorists rush to fill their tanks amid fears of further price increases.
Authorities in Thailand have already asked many government workers to work from home to reduce energy consumption, while officials have been advised to avoid non-essential international travel.
Meanwhile, the Philippine government has introduced a four-day work week for public sector employees as part of measures to reduce fuel consumption and limit the economic impact of the global energy shock.
Analysts warn that if the conflict continues to disrupt oil shipments in the Middle East, the resulting supply shock could trigger higher inflation and slower economic growth worldwide, particularly for oil-importing countries.
