Meanwhile, crude oil markets experienced turbulence as prices tumbled. Brent crude fell 1% to $86.92 per barrel, and West Texas Intermediate (WTI) dropped 0.4% to $83.10 per barrel. The decline follows the International Energy Agency’s (IEA) unprecedented proposal to release historic oil reserves into the market amid supply concerns stemming from tensions involving Iran, the U.S., and Israel.
Analysts note that the IEA’s move potentially exceeding the 182 million barrels released in 2022—could offset disruptions in Gulf exports for roughly 12 days. However, skepticism lingers over the pace at which these reserves can practically be deployed.
Geopolitical tensions are escalating in the region. The U.S. and Israel launched airstrikes on Iran, targeting critical military assets near the Strait of Hormuz. U.S. forces also neutralized 16 Iranian minelaying vessels, while President Donald Trump emphasized the importance of securing oil shipments through the strategic waterway.
Energy market watchers warn that despite temporary relief from reserve releases, the underlying supply risks persist. Abu Dhabi’s ADNOC had to halt operations at its Ruwais refinery due to a fire from drone strikes. Meanwhile, Saudi Arabia is trying to boost shipments via the Red Sea, but it falls short of compensating for potential losses at Hormuz.
Industry insights from Wood Mackenzie suggest the current conflict could reduce Gulf oil and petroleum product supply by about 15 million barrels per day, pushing crude prices to $150 per barrel in extreme scenarios. Morgan Stanley warns that even if hostilities cease quickly, disruptions in energy markets may persist for several weeks.
The market remains on edge, watching every development from the Middle East while gold continues its steady ascent, reflecting investors’ search for a safe haven amid uncertainty.
