Crude prices briefly fell after reports that the International Energy Agency would release oil reserves, but rebounded as markets doubted the plan would proceed to offset supply shocks from the US-Israeli conflict with Iran. The proposed drawdown would exceed the 182 million barrels released in 2022. Brent and West Texas Intermediate prices rose by session's end.
In Manila, crude prices briefly plunged after reports emerged that the International Energy Agency (IEA) would release oil reserves to counter potential supply disruptions from the US-Israeli conflict with Iran. However, prices rebounded as markets expressed doubts about the plan proceeding. The Wall Street Journal reported that this proposed drawdown would surpass the 182 million barrels that IEA members released in 2022 during Russia's full-scale invasion of Ukraine.
In a note to clients, Goldman Sachs analysts stated that such a stockpile release would offset 12 days of their estimated 15.4 million barrel-per-day disruption in Gulf exports. Brent futures rose 59 cents, or 0.7 percent, to $88.39 a barrel, while United States West Texas Intermediate (WTI) climbed 98 cents, or 1.2 percent, to $84.43 a barrel. Both contracts extended losses in early Asian trade after dropping more than 11 percent on Tuesday, though US crude initially leaped five percent at the open.
Some analysts expressed skepticism about the IEA's proposal and its price impact. “Moves like IEA SPR release are not the solution to the crisis. How oil prices will evolve will depend on the duration of the Iran war,” said DBS energy sector team lead Suvro Sarkar. He added that near-term upside price risks would be “reined in through periodic strategic signaling moves like we have seen over the past couple of days to calm markets down.”
G7 officials also convened online to discuss a potential release of emergency oil stockpiles to ease the market blow. Ahead of the initial positive reaction to the IEA report, prices tanked on Tuesday after US President Donald Trump stated the war on Iran was “going to be ended soon” and it emerged that the Group of Seven would consider tapping stockpiles. Trump has repeatedly indicated the US is prepared to escort tankers through the Strait of Hormuz when necessary, but sources told Reuters the US Navy has refused shipping industry requests for military escorts due to currently high risks.
Fears that the conflict could persist—choking energy supplies—pushed both main crude contracts soaring on Monday to nearly $120 a barrel, the highest since 2022. Gas prices also surged. French President Emmanuel Macron was scheduled to host a video call with other G7 leaders on Wednesday to discuss the Middle East conflict's impact on energy and response measures.
In New York on a working visit, President Marcos said his administration is considering sourcing fuel from non-traditional suppliers, with no end in sight to the Middle East crisis. The Department of Energy is seeking legislative approval to import cheaper biofuels—a step officials deem necessary to temper “painful” fuel price hikes, though local producers warn it could devastate the domestic industry.
