Global oil prices are continuing to surge despite the International Energy Agency’s (IEA) announcement of the largest release of emergency reserves in history.
Brent crude, the international benchmark, rose about 15 percent after the Paris-based IEA on Wednesday announced plans to release 400 million barrels to stabilise prices amid the fallout of the United States and Israel’s war with Iran.Oil prices hovered at about $100 a barrel as of 02:00 GMT on Thursday, up more than 35 percent compared with before the start of the war.
While the IEA’s release may offer some relief in the short-term, it will likely have a minimal effect on lowering prices if the Strait of Hormuz remains effectively closed, according to market analysts.
“It’s not a silver bullet to solve everything. You have to solve the underlying problem,” Maksim Sonin, an energy executive who is a fellow at Stanford University’s Center for Fuels of the Future, told Al Jazeera.
“Markets trade on expectations, and so far they are on the concerned side,” Sonin said.
Traffic through the strait, which is bordered by Iran, Oman and the United Arab Emirates, has come to an effective halt amid Tehran’s threats against shipping in the region, blocking about one-fifth of the global oil supply.
Iran’s Islamic Revolutionary Guard Corps (IRGC) said on Wednesday that it would not allow “even one litre of oil” through the waterway and the world should expect oil to soar to $200 a barrel.
At least five commercial ships were attacked in the region on Wednesday, including two oil tankers in the Iraqi port of al-Faw.
