On the morning of 11/3, US WTI crude oil prices dropped 0.6% to 82.9 USD per barrel. Brent crude fell 0.4% to 87.4 USD.
The price decline followed a Wall Street Journal report stating that the International Energy Agency (IEA) recently proposed member countries release a record amount of oil from reserves to cool the market. Sources familiar with the WSJ report indicated this volume would exceed the 182 million barrels released in 2022 when the Russia-Ukraine conflict erupted.
Previously, US WTI crude oil prices had temporarily risen 3.5% to 86.3 USD per barrel on the morning of 11/3 due to tight supply from the Middle East. On 10/3, both WTI and Brent oil fell more than 11% – their sharpest drop since 2022 – after US President Donald Trump predicted the Middle East conflict would soon end.
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WTI oil price movements over the past month. Chart: Trading Economics |
On 10/3, the US and Israel conducted airstrikes on Iran, which the Pentagon described as the most intense since the conflict began. The US also announced it had destroyed 16 Iranian mine-laying boats near the Hormuz Strait – a crucial oil and gas shipping route paralyzed by the conflict. Trump warned that any mines Iran laid in the strait "must be removed immediately".
He repeatedly stated that the US was ready to escort oil tankers through the Hormuz Strait when necessary. However, Reuters sources reported that the US Navy declined this offer from shipping companies due to the currently high risk of attack.
"We expect oil prices to remain highly volatile, influenced by new developments, and trade within a broad range of 75-105 USD per barrel in the upcoming sessions," said Tony Sycamore, a market analyst at IG in Sydney.
On 9/3, crude oil prices briefly neared 120 USD per barrel, their highest since June 2022. G7 finance ministers held an online meeting to discuss the possibility of releasing oil from emergency reserves to mitigate market shock. However, they did not reach a decision.
The G7 energy ministers' meeting on 10/3 also failed to agree on releasing oil reserves. Instead, they requested the International Energy Agency (IEA) to assess the situation before taking action.
Today, French President Emmanuel Macron will host an online meeting with G7 leaders to discuss the impact of the Middle East conflict on the energy sector and propose solutions.
According to consulting firm Wood Mackenzie, the conflict is currently reducing the supply of oil and oil products from the Gulf to the market by about 15 million barrels per day. This could push oil prices to 150 USD per barrel.
Ha Thu (according to Reuters)
