Crude Oil Price: Saudi Aramco CEO Amin Nasser has warned the Iran war could have catastrophic consequences for global oil markets as inventories sit at five year lows and disruptions in the Strait of Hormuz threaten energy supplies and industries from aviation to agriculture and automobiles.
Oil prices had briefly approached $120 earlier in the week before retreating as traders reacted to comments from US President Donald Trump suggesting the conflict could end soon.
According to a report by Reuters, oil shipments have been largely blocked from using the shipping artery, where normally roughly 20% of the world’s oil would pass through daily.
Iran’s Revolutionary Guards said on Tuesday they would not allow “one litre of oil” to be shipped from the Middle East if U.S. and Israeli attacks continue.
“There would be catastrophic consequences for the world’s oil markets and the longer the disruption goes on … the more drastic the consequences for the global economy,” Reuters quoted Aramco CEO as telling reporters on an earnings call.
“While we have faced disruptions in the past, this one by far is the biggest crisis the region’s oil and gas industry has faced.”
Crude Oil Prices Today
Crude oil prices further declined on Wednesday after reports surfaced that the International Energy Agency (IEA) proposed the largest release of emergency reserves in its history to cool the price surge fuelled by the US‑Iran war.
The proposed release would surpass the 182 million barrels deployed in two tranches in 2022 following Russia’s invasion of Ukraine, according to multiple reports. The Group of Seven (G7) nations have asked the IEA to prepare scenarios for such a move, reports said.
Brent crude oil price fell 0.99 per cent to $86.93 a barrel, while US West Texas Intermediate (WTI) futures dropped 0.75 per cent to $82.82.
Overnight, both futures had settled down more than 11 per cent, marking the steepest single‑day decline in four years.
The US-Iran war entered its second week with no signs of resolution in sight. Trump warned Iran against placing mines in the Strait of Hormuz following reports of Iran having already done so or in preparations.
The conflict’s economic impact is already being felt in the United States, where gasoline prices have begun rising sharply.
Meanwhile, a group of US lawmakers has introduced legislation which would temporarily suspend the federal gasoline tax to ease pressure on households.
(With Reuters, IANS inputs)
