Oil prices jumped more than 8 per cent on Thursday, with Brent crude climbing to $100 per barrel, as traders remained skeptical that the release of government stockpiles would be enough to counter the major supply disruption caused by the war in the Middle East.
U.S. benchmark West Texas Intermediate rose 8.8 per cent to $95 per barrel, while global benchmark Brent gained about 8.9 per cent to trade near $100, despite the International Energy Agency announcing the largest emergency release of crude reserves in its history.
The IEA announced on Wednesday that its 32 member countries will release 400 million barrels of oil from emergency reserves, the largest coordinated drawdown since the agency was formed after the 1973 oil embargo.
The U.S. said it will contribute 172 million barrels from its Strategic Petroleum Reserve.
Energy Secretary Chris Wright noted that shipments could start as soon as next week and may take about 120 days to complete.
However, the oil market has largely ignored the announcements as prices continue to climb, reflecting traders’ skepticism that the measures will be sufficient to close the supply gap if disruptions to shipments through the Strait of Hormuz persist.
Analysts say market unease also stems from uncertainty over how quickly the additional barrels will reach the market, according to industry veterans.
While the IEA’s announcement marks an unprecedented intervention, the agency has not specified the pace at which member countries will release their reserves or how the oil will be distributed.
