Oil Surges Past $100 Despite IEA Emergency Stockpile Release

Oil prices climbed above $100 per barrel on Thursday while global stock markets declined, as renewed Iranian attacks on energy facilities in the Middle East and mounting concerns over the global economy overshadowed a record release of emergency crude reserves by the International Energy Agency.

The IEA announced on Wednesday that its member countries had agreed to release 400 million barrels of oil from their strategic reserves the largest coordinated stock release in the agency’s history.

Despite the move, markets remained uneasy about potential disruptions to oil supplies from the Middle East, particularly with the Strait of Hormuz a key passage for about one-fifth of the world’s crude shipments effectively shut.

As tensions escalated, two tankers in Iraqi waters were reportedly struck on Thursday. Baghdad had earlier indicated plans to reduce oil production due to the crisis, a step that Kuwait and Saudi Arabia were also reported to be considering.

Bahrain also said Iran carried out an attack on fuel storage tanks in the country. Saudi Arabia reported intercepting drones heading toward the Shaybah oil field, while drones struck fuel tanks at Oman’s Salalah port, forcing authorities to suspend operations there.

In a separate development, the United Kingdom Maritime Trade Operations agency reported that a container ship near the United Arab Emirates had been hit by an “unknown projectile.”

Brent crude climbed to a high of $101.59 per barrel, while West Texas Intermediate rose to nearly $96. Both benchmarks had previously surged by as much as 30 per cent on Monday, approaching $120 before easing somewhat.

Although prices later moderated, analysts warned that continued hostilities could keep oil trading between $90 and $100 per barrel for an extended period.

Iran signalled it was prepared for a prolonged confrontation, warning that a drawn-out conflict could severely damage the global economy and threatening vessels connected to the United States and its allies.

The Islamic Revolutionary Guard Corps said it could target economic centres and financial institutions linked to US and Israeli interests.

An adviser to the Guards’ commander-in-chief, Ali Fadavi, warned in comments broadcast on state television that a long war of attrition could damage both the American and global economies.

Iran’s Tasnim news agency also published a list of potential technology-related targets, including offices belonging to major companies such as Amazon, Google, Microsoft and Nvidia located in Gulf countries and Israel.

Analysts say any prolonged disruption to shipping through the Strait of Hormuz which also carries about one-third of the fertiliser used globally for food production could trigger a major economic shock, particularly for Asia and Europe.

Airlines have been among the hardest hit sectors, with several carriers reconsidering routes through the Middle East while also dealing with rising fuel costs.

Air New Zealand announced it would cancel about 1,100 flights over the next two months, while Hong Kong’s Cathay Pacific introduced new fuel surcharges on most routes, roughly doubling existing fees.

New Zealand’s government said it was considering invoking emergency legislation that could restrict vehicle use if fuel shortages worsen.

In Australia, authorities announced plans to temporarily ease fuel quality standards by allowing higher sulphur levels for about two months, a move expected to release around 100 million litres of fuel into the domestic market.

The jump in oil prices has also revived fears of another surge in global inflation and the possibility that central banks may have to raise interest rates again, after many had been considering rate cuts only weeks earlier.

Those concerns weighed on global equities, with markets across Asia declining on Thursday. Major indices in Tokyo, Hong Kong, Shanghai, Sydney, Seoul, Mumbai, Wellington, Singapore, Taipei, Manila and Jakarta all recorded losses, while European markets in London, Paris and Frankfurt opened lower.

Stephen Innes of SPI Asset Management said the emergency oil release was unlikely to significantly calm markets while tensions around the Strait of Hormuz remained high.

He noted that releasing oil from reserves may only briefly ease volatility but would not address the underlying risks posed by threats to one of the world’s most important shipping routes.

US President Donald Trump, however, claimed recent military strikes had significantly weakened Iran.

Speaking to reporters after addressing supporters, he said the conflict had already been largely decided in the early stages.

Israel’s military, meanwhile, suggested the confrontation could continue, saying it still had a wide range of targets.

Oil prices remained elevated in early trading on Thursday, with West Texas Intermediate rising to $90.72 per barrel and Brent North Sea crude reaching $96.04.

Stock markets reflected investor caution. Japan’s Nikkei 225 fell 1.0 per cent to close at 54,452.96, Hong Kong’s Hang Seng dropped 0.7 per cent to 25,716.76, and the Shanghai Composite slipped 0.1 per cent to 4,129.10.

In Europe, London’s FTSE 100 declined 0.6 per cent to 10,296.02, while the Dow Jones Industrial Average in New York had earlier ended 0.6 per cent lower at 47,417.27.

Currency markets also showed signs of caution, with the euro trading at $1.1542, the pound at $1.3379, and the dollar at 158.89 yen.