- France will host the call from G7 leaders today
- US stocks of crude oil, gasoline and distillates fell.
- Brent crude futures traded 11 cents higher, or 0.13 percent higher, at $87.91 a barrel.
Oil prices rocked Wednesday after The Wall Street Journal reported that the International Energy Agency proposed the largest release of oil reserves in its history to compensate for supply disruptions resulting from the war in Iran.
Brent crude futures were trading 11 cents higher, or 0.13 percent higher, at $87.91 a barrel at 01:29 GMT. US West Texas Intermediate (WTI) traded 7 cents higher and was last up 0.08% at $83.52 per barrel.
Both contracts were abandoned immediately after the WSJ report was published, reversing WTI’s early gains.
The IEA’s proposed withdrawal would exceed the 182 million barrels of oil that IEA member countries put on the market in two launches in 2022, when Russia launched its full-scale invasion of Ukraine, the agency said. WSJ » said, citing officials close to the matter.
The IEA and the White House did not immediately respond. Reuters“Requests for comments.
The United States and Israel hit 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 mine-laying Iranian ships near the Strait of Hormuz on Tuesday, US Central Command said, as US President Donald Trump warned that any mines planted in the strait by Iran must be immediately removed.
Trump has repeatedly said the United States is prepared to escort tankers through the Strait of Hormuz if necessary. However, sources told Reuters that the US Navy had refused requests for military escorts from the maritime sector because the risk of attacks was too high at the moment.
“We continue to expect crude oil to remain highly volatile, driven by headlines, while trading in a wide range between $75 and $105 in the coming sessions,” Tony Sycamore, market analyst at IG in Sydney, said in a note.
Both contracts plunged more than 11% on Tuesday, the steepest percentage decline since 2022, a day after Trump predicted a rapid end to the war, and after hitting a peak above $119 a barrel on Monday, their highest since June 2022.
G7 officials have since met online to discuss a possible release of emergency oil stocks to ease the shock to the market.
French President Emmanuel Macron will hold a video call with other leaders of G7 countries on Wednesday to discuss the impact of the Middle East conflict on energy and measures to address the situation.
Abu Dhabi oil giant ADNOC has closed its Ruwais refinery in response to a fire at a facility at the complex following a drone strike, according to a source, marking the latest disruption to energy infrastructure due to the US-Israeli war with Iran.
Saudi Arabia, the world’s largest oil exporter, is expected to increase supplies via the Red Sea, although they remain well below the levels needed to offset falling flows from the Strait of Hormuz, maritime data shows.
The kingdom is counting on the Red Sea port of Yanbu to help boost exports to avoid sharp production cuts as its neighbors Iraq, Kuwait and the United Arab Emirates have already cut production amid the US-Israeli war against Iran.
Energy consultancy Wood Mackenzie said the war is currently reducing market supplies of oil and petroleum products from the Gulf by about 15 million barrels per day, which could push crude prices to $150 per barrel.
“Even a quick resolution likely means weeks of disruption for energy markets,” Morgan Stanley said in a note.
Reflecting stronger demand, U.S. inventories of crude, gasoline and distillates fell last week, market sources said, citing figures from the American Petroleum Institute on Tuesday.
