- France to host G7 leaders call today
- US stocks of crude oil, gasoline and distillate fell.
- Brent futures traded 11 cents, or 0.13% higher, at $87.91 a barrel. barrel.
Oil prices rose on Wednesday after the Wall Street Journal reported that the International Energy Agency has proposed the largest release of oil reserves in its history to offset supply disruptions caused by the war in Iran.
Brent futures were up 11 cents, or 0.13% higher, at $87.91 a barrel. barrel at 0129 GMT. US West Texas Intermediate (WTI) traded 7 cents higher and was last up 0.08% at $83.52 a barrel. barrel.
Both contracts fell immediately after the WSJ report, reversing early gains in WTI.
The IEA’s proposed move would exceed the 182 million barrels of oil that IEA member countries put on the market in two releases in 2022 when Russia launched its full-scale invasion of Ukraine, WSJ said, citing officials familiar with the matter.
The IEA and the White House did not immediately respond Reuters‘ requests for comments.
The US and Israel struck Iran on Tuesday with what the Pentagon and Iranians on the ground called the most intense airstrikes of the war.
The US military also “eliminated” 16 Iranian minelaying vessels near the Strait of Hormuz on Tuesday, the US Central Command said, as US President Donald Trump warned that all mines laid by Iran in the strait must be removed immediately.
Trump has repeatedly said the United States is prepared to escort tankers through the Strait of Hormuz when necessary. However, sources told Reuters that the US Navy has rejected requests from the shipping industry for military escorts as the risk of attack is too high for now.
“We continue to expect crude oil to remain highly volatile, driven by headlines, while trading within a broad range between $75ish and $105ish in the coming sessions,” Tony Sycamore, market analyst at IG in Sydney, said in a note.
Both contracts fell more than 11% on Tuesday, the steepest percentage decline since 2022, a day after Trump predicted a quick end to the war, and after rising to a session high above $119 a barrel. barrel, their highest since June 2022, on Monday.
G7 officials have since gathered online to discuss a potential release of emergency oil stocks to soften the market blow.
French President Emmanuel Macron will host a video call with other G7 leaders on Wednesday to discuss the implications of the Middle East conflict on energy and measures to address the situation.
Abu Dhabi’s state oil giant ADNOC has shut down its Ruwais refinery in response to a fire at a facility in the complex following a drone strike, according to a source, marking the latest disruption to energy infrastructure due to the US-Israel war against Iran.
Saudi Arabia, the world’s biggest oil exporter, is seen increasing supplies via the Red Sea, although they are still well below the levels needed to offset the drop in flows from the Strait of Hormuz, shipping data showed.
The kingdom relies on the Red Sea port of Yanbu to help it boost exports to stave off steep production cuts as its neighbors Iraq, Kuwait and the United Arab Emirates have already cut production amid the US-Israeli war with Iran.
Energy consultancy Wood Mackenzie said the war is currently reducing the Gulf’s oil and oil supply to the market by about 15 million barrels a day, which could push crude prices to $150 a barrel.
“Even a quick resolution likely involves weeks of disruption for energy markets yet,” Morgan Stanley said in a note.
U.S. oil, gasoline and distillate inventories fell last week amid higher demand, market sources said, citing figures from the American Petroleum Institute on Tuesday.
