Crude oil prices fell sharply during the evening session on Tuesday, 10 March, as hopes built for a possible release of emergency crude reserves to offset supply shortages.
Brent Crude, the international standard, tumbled 12% to the day’s low of $87.06 per barrel. Today’s fall follows a 17% drop from a four-year high in the previous session, when prices settled at $98.96.
The International Energy Agency will hold an extraordinary meeting on Tuesday to discuss a possible release of emergency stockpiles. The more than 30 member states are advanced economies in Europe, North America, and Northeast Asia, CNBC reported.
Oil prices retreat but remain elevated since start of war
With today’s drop, Brent crude prices have effectively eased 27% from recent highs, yet they are still 19.5% higher than when the war started on 28 February.
US President Donald Trump also sought to reassure markets, saying he would waive certain oil-related sanctions and deploy the US Navy to escort tankers through the Strait of Hormuz.
However, hours later, Trump threatened in a social media post that the US would dramatically increase attacks if Iran tried to close the Strait of Hormuz.
Iran’s paramilitary Islamic Revolutionary Guard Corps doubled down, saying in a statement that it “will not allow the export of even a single litre of oil from the region to the hostile side and its partners until further notice.”
Iran has effectively stopped tankers from using the Strait of Hormuz, the shipping lane between the Persian Gulf and the Gulf of Oman — the gateway to the Indian Ocean — through which nearly 20% of the world’s oil is transported.
Meanwhile, Amin Nasser, president and CEO of Saudi Aramco, said tankers were being rerouted to avoid the Strait of Hormuz and that its East-West pipeline would reach its full capacity of 7 million barrels a day, transporting crude to Yanbu on the Red Sea this week, Associated Press reported.
The sharp rise in crude oil prices amid fears of supply disruptions has rocked markets worldwide and stoked inflation concerns, wiping out billions of dollars in investor wealth.
Iraq, Kuwait, and the UAE have reportedly cut oil production as storage tanks fill, due to reduced crude export capacity. Iran, Israel, and the United States have also attacked oil and gas facilities since the war started, worsening supply concerns.
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