Oil Continues to Rise as Iran Statements Overshadow Release Strategy

Oil Prices Surge Amid Ongoing Iran Conflict

Oil prices climbed for a second consecutive day, as heightened tensions and strong rhetoric surrounding the Iran conflict fueled fears of a drawn-out war. These concerns overshadowed efforts by major economies to stabilize the market through emergency crude stockpile releases.

West Texas Intermediate (WTI) crude surged up to 6.6%, reaching $93.01 per barrel after nearly a 5% increase the previous day. Iran has reportedly informed regional mediators that any ceasefire would require the United States to guarantee that neither it nor Israel would attack Iran in the future—a demand Washington is unlikely to meet, further reducing hopes for a swift resolution.

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Although prices initially rose, they later eased after the United States revealed plans to release 172 million barrels from its reserves—almost half of its current stock—as part of a global initiative to temper soaring energy costs.

On Wednesday, oil prices briefly dipped after the International Energy Agency (IEA) announced an unprecedented release of 400 million barrels, a move far larger than the response to Russia’s 2022 invasion of Ukraine.

Despite these interventions, the vital Strait of Hormuz remains largely inaccessible to shipping. The market is closely monitoring for any indication that commercial activity might resume. On Wednesday, three ships in the strait and the Persian Gulf were reportedly hit by suspected projectiles, highlighting the ongoing dangers for maritime trade.

The near-total closure of the Strait of Hormuz—which typically handles about 20% of the world’s oil shipments—has forced major Gulf producers to reduce output, pushing up prices for crude, natural gas, and refined products like diesel. The conflict, now entering its second week, has sparked worries about a potential inflationary crisis.

Robert Rennie, head of commodity research at Westpac Banking Corp, commented, “With hostilities showing no sign of ending, daily increases in supply disruptions, and the strait still effectively blocked, we expect Brent crude to remain in the elevated $90-110 range into next week.”

Global Response: Emergency Oil Releases

Several nations have announced plans to tap into their strategic reserves. Japan intends to release 80 million barrels, the UK will contribute 13.5 million barrels, and South Korea plans to provide 22.5 million barrels. Canada has also requested domestic oil companies to make some of their reserves available.

Worldwide oil demand is just over 100 million barrels per day, and Gulf producers have already cut about 6% of that supply. Despite these efforts, the market remains largely unmoved as the conflict drags on.

US Leadership and Outlook

During a speech in Kentucky on Wednesday, President Donald Trump reiterated his belief that the conflict could end soon, but also emphasized that the US would remain involved until its objectives are achieved. “We don’t want to leave early, right?” he remarked to the audience.

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