Oil Prices Exceed $100 Despite Strategic Reserves Being Tapped
Oil prices recorded a new increase today, Thursday, surpassing the $100 per barrel mark despite unprecedented interventions from major economic powers through the injection of strategic oil reserves into the market, aiming to alleviate investor concerns tied to supply disruptions due to the war in the Middle East.
Brent crude reached approximately $101.59 per barrel during trading, while West Texas Intermediate hit around $96 per barrel. After several hours of trading, prices slightly retreated, stabilizing Brent at $98.04, reflecting an increase of nearly 6.6% since the outbreak of war on February 28, whereas West Texas Intermediate was at $92.72, marking a rise of about 6.3%.
The oil markets have experienced significant volatility in recent days; prices surged earlier in the week by about 30% to approach $120 per barrel before retreating somewhat and then rising again.
In an effort to contain the crisis, the International Energy Agency, through its Executive Director Fatih Birol, announced that member countries would release 400 million barrels of oil into the market to compensate for the shortages resulting from the effective closure of the Strait of Hormuz.
The unanimous decision was made by 32 member countries of the agency, including G7 nations. The United States is expected to contribute approximately 172 million barrels, nearly 40% of its strategic reserves, which will be released gradually over the next three months.
Impact of the War in the Middle East
These developments come amid escalating military tensions following joint strikes by Israel and the United States against Iran in late February, leading to an effective closure of the Strait of Hormuz, which typically sees about one-fifth of the world’s oil and liquefied natural gas trade passing through it.
Tehran continues to carry out retaliatory strikes targeting oil facilities in several Gulf countries, heightening market fears regarding the stability of global supplies.
In this context, analysts believe that using strategic reserves may help temporarily ease pressure but does not provide a permanent solution to the crisis. Energy market experts have indicated that tapping into these emergency stocks is often a short-term measure to calm the markets.
International Concerns Regarding Navigation in Hormuz
The escalation in the Strait of Hormuz poses a significant concern for the global economy due to its vital role in energy transport. In this context, Emmanuel Macron stated that there are currently no intelligence confirmations regarding the planting of naval mines in the strait, despite reports suggesting otherwise.
He added that G7 countries are working on preparing a mechanism to coordinate maritime operations to escort ships and ensure freedom of navigation in the strait; however, the current conditions do not allow for its immediate activation.
Macron also emphasized that the tensions in oil markets do not justify lifting the sanctions imposed on Russia due to its war with Ukraine, confirming a consensus with Donald Trump on the continuation of these sanctions despite pressures in the energy market.
