The crude market has been hit by wild volatility since the United States and Israel began striking Iran at the end of last month, with Tehran retaliating by attacking targets across the oil-rich Gulf and effectively shutting down the crucial Strait of Hormuz.
Fears that the conflict could drag on for some time — choking off energy supplies — sent both main crude contracts soaring on Monday to within a whisker of US$120 a barrel, the highest since 2022.
Gas prices also rocketed.
However, prices tanked on Tuesday after US President Donald Trump said war on Iran was “going to be ended soon” and it emerged that the Group of Seven developed nations would discuss tapping stockpiles.
Hopes were given an extra boost by a Wall Street Journal report saying the IEA proposed a release of reserves that would exceed the 182 million barrels member countries put on the market following the beginning of hostilities between Russia and Ukraine.
The plan was circulated at an emergency meeting of energy officials from the IEA’s 32 member countries on Tuesday, with a decision expected on Wednesday, according to the Journal.
Brent and West Texas Intermediate dropped about five percent Wednesday but pared the losses as investors remain concerned about the crisis, which shows no sign of ending despite Trump’s remarks.
Equity markets rose, with Tokyo and Seoul, which have seen the widest swings since the crisis unfolded, both enjoying big gains.
In Hong Kong, the Hang Seng Index gained 152 points, or 0.59 percent, to open at 26,112 points on Wednesday.
Markets in Sydney, Wellington, Manila and Jakarta also rose. (AFP/Xinhua)
Edited by Tony Sabine
