Oil prices fell after proposal to release largest strategic reserves
Oil prices fell on Wednesday after the International Energy Agency (IEA) proposed the largest release of oil from strategic reserves, as sentiment was weighed down by the risks of supply disruptions due to the US and Israel's conflict with Iran.
This was reported by Economic Pravda, citing Reuters.
Brent futures fell 88 cents, or 1%, to USD 86.92 per barrel.
US West Texas Intermediate (WTI) lost 35 cents, or 0.4%, to USD 83.10.
U.S. oil prices jumped 5% at the open after both contracts plunged more than 11% on Tuesday, their steepest percentage decline since 2022, a day after Donald Trump predicted a quick end to the war.
WTI soared above USD 119 a barrel on Monday, its highest since June 2022.
"Following Monday's sharp rally, oil prices continued to normalize downwards in a volatile manner," UOB analysts said in a note to clients, adding that markets would remain focused on developments in the Middle East as they gauge how long energy prices could remain expensive.
The IEA's proposed release would exceed the 182 million barrels that IEA member countries released to the market in two releases in 2022 after russia's full-scale invasion of Ukraine, the WSJ reported, citing officials familiar with the matter.
A release of that magnitude could offset 12 days of disruption to Gulf exports, which the investment bank estimates at 15.4 million barrels per day, Goldman Sachs analysts said in a note.
On Tuesday, the United States and Israel launched strikes on Iran in what the Pentagon and witnesses on the ground described as the most intense airstrikes of the war.
The U.S. military also "destroyed" 16 Iranian minelaying vessels near the Strait of Hormuz, U.S. Central Command said.
US President Donald Trump has warned that any mines placed by Iran in the Strait must be removed immediately.
It is noted that Trump has repeatedly stated that the US is ready to escort tankers through the Strait of Hormuz if necessary.
At the same time, sources told Reuters that the US Navy has refused requests from the shipping industry for military escort because the risk of attacks is currently too high.
As Ukrainian News Agency earlier reported, oil prices on Monday, March 9, jumped to almost USD 120 per barrel for the first time since 2022.