International crude oil prices surged on Thursday morning despite the International Energy Agency’s (IEA) decision to release 400 million barrels of crude stocks.
Prices jumped after two oil tankers were attacked in Iraqi waters, leading to the suspension of oil terminal operations in the country.
Iraq is one of the largest oil suppliers globally and has been the second-largest oil supplier to India in the past few years, making the disruption significant for . The escalation also comes in the backdrop of Iran warning on Wednesday that oil could surge to $200 a barrel as tensions in the region intensified with attacks on merchant ships.
Price spike
At 8:25 AM, the April contract of benchmark Brent crude on the Intercontinental Exchange was at $100.09 per barrel, higher by 8.82%.
Meanwhile, the April contract of West Texas Intermediate (WTI) on the NYMEX rose 8.85% to $94.68 per barrel.
According to a Reuters report, two tankers carrying Iraqi fuel oil were hit by unidentified attackers in Iraq’s territorial waters, causing them to catch fire. An initial investigation by Iraqi security officials suggested explosive-laden boats from Iran had struck the two tankers, the report said.
Following the attacks, Iraq suspended operations at all its oil terminals, according to reports.
Further heightening concerns, Ebrahim Zolfaqari, spokesperson of Iran’s military command on Wednesday said: “Get ready for oil to be $200 a barrel, because the oil price depends on regional security which you have destabilized.”
IEA intervention
The member countries of the International Energy Agency (IEA) on Wednesday decided to from their stocks in a bid to ease global supply pressures.
This would be the largest-ever stockpile release by IEA members.
In a statement issued late on Wednesday evening, India’s petroleum ministry said the country welcomed the move.
“India, as an Associate Member of the International Energy Agency (IEA) and an active participant in international energy cooperation, welcomes the IEA’s decision to release emergency oil stocks amid the prevailing supply disruptions.”
“India stands ready to take appropriate measures, as necessary, to support global market stability in alignment with the efforts of the International Energy Agency,” it said.
India exposure
The disruption is significant for India because the country imports around 90% of its crude oil requirements, leaving it highly exposed to global price swings.
The , through which a large portion of India’s crude imports pass, remains a key chokepoint in global energy trade.
A report by the United Nations Trade and Development (UNCTAD) titled “Strait of Hormuz Disruptions – Implications for Global Trade and Development” noted that the strait carries around one-quarter of global seaborne oil trade, along with significant volumes of liquefied natural gas and fertilizers.
“Military escalation in the region has disrupted shipping flows through this narrow passage, raising concerns about ripple effects across energy markets, maritime transport and global supply chains,” it said.