Oil supply disruption intensified on Wednesday as attacks on ships in the Strait of Hormuz worsened fears of global shortages. Analysts said even the International Energy Agency’s record release of reserves may not fully stabilize markets.
Brent crude rose $4.18, or 4.8%, closing at $91.98 per barrel, while U.S. West Texas Intermediate climbed $3.80, or 4.6%, to $87.25 per barrel. The surge came after three additional vessels were hit by projectiles, raising the total to 14 ships struck since the Iran war began.
The Strait of Hormuz, a narrow channel critical to global oil flows, has seen shipping nearly halt since February 28, when U.S. and Israeli strikes on Iran began. The Strait handles around a fifth of the world’s oil supply.
President Donald Trump stated the United States will escort tankers through the strait when necessary. However, U.S. Navy sources said requests for military escorts remain unfulfilled due to high risks of attacks.
The IEA recommended releasing 400 million barrels from strategic reserves, the largest intervention in its history, aiming to ease the energy crisis. Analysts noted, however, that the release equals roughly four days of global oil production, insufficient to offset prolonged supply disruptions.
Analysts at Macquarie calculated that the proposed release covers only about 16 days of crude flows through the Gulf. They said, “If that doesn’t sound like much, it isn’t,” underscoring the scale of the shortage.
Oil prices ignored a U.S. report showing domestic crude stockpiles increased more than expected. Gasoline and distillate stocks, which include diesel and jet fuel, fell sharply, heightening supply concerns.
Abu Dhabi’s ADNOC shut its Ruwais refinery after a fire caused by a drone strike disrupted the facility. Meanwhile, Saudi Arabia is attempting to boost exports through the Red Sea port of Yanbu, though flows remain far below levels lost from the Hormuz Strait.
Energy consultancy Wood Mackenzie estimated the war reduces Gulf oil and product supply by about 15 million barrels per day, potentially pushing crude prices toward $150 per barrel. Morgan Stanley added that even a quick resolution may leave weeks of disruption in energy markets.
In conclusion, oil supply disruption continues to weigh heavily on global markets. Analysts expect prices to remain volatile until shipping through the Strait of Hormuz stabilizes and supply chains recover.
