Oil Prices Rise Despite Record Reserve Release
Oil prices continued to increase on Thursday even after major countries agreed to release a record amount of oil from their emergency reserves in an effort to mitigate the impact of the conflict involving Iran.
Brent crude surged by nearly 9%, surpassing $100 ($74.79) a barrel during Asian trading hours, despite the announcement from all 32 members of the International Energy Agency (IEA) to release 400 million barrels in response to supply concerns.
Iran's Warning on Oil Prices Amid Rising Tensions
On Wednesday, Iran issued a warning that oil prices could reach $200 a barrel as its attacks on ships intensified in the Strait of Hormuz, a vital maritime route for energy shipments.
An Islamic Revolutionary Guard Corps (IRGC) spokesperson declared that any vessel associated with the US, Israel, or their allies would be targeted.
"You will not be able to artificially lower the price of oil. Expect oil at $200 per barrel," the spokesperson said.
"The price of oil depends on regional security, and you are the main source of insecurity in the region."
Significance of the Strait of Hormuz and IEA's Response
The narrow shipping route is critical to the global economy, as approximately one-fifth of the world's energy supplies typically transit through it.
IEA members account for around two-thirds of global energy production and consumption.
The planned release of reserves is more than double the previous IEA record, which was implemented following Russia's invasion of Ukraine in 2022.
Market Volatility and Impact on Fuel Prices
Global oil markets have experienced significant volatility since the US and Israel conducted airstrikes against Iran on 28 February, with Brent crude reaching nearly $120 a barrel earlier this week.
This volatility has contributed to rising fuel prices worldwide.
In the United States, the average price of petrol exceeded $3.50 per gallon on Tuesday, according to the American Automobile Association.
Energy Challenges in Asia
Countries in Asia, which heavily depend on Middle Eastern energy supplies, have been particularly affected.
Long queues were observed at petrol stations in the Philippines, Thailand, and Vietnam this week as consumers rushed to purchase fuel.
In response, Thai authorities have urged most government agency staff to work from home to conserve energy and have discouraged officials from undertaking non-essential overseas travel.
The Philippines has also initiated a four-day workweek for government employees to reduce energy consumption.
