Oil jumped above $100 and equities plummeted on Thursday as Iran’s latest attempts to damage supplies in the Middle East and threats to bring down the global economy overshadowed a record release of strategic crude by the International Energy Agency.
The IEA said on Wednesday that its members had decided to discharge the most oil ever, 400 million barrels, from their stockpiles.However, the action failed to allay concerns about the Middle East’s oil supply being choked off, as a fifth of the world’s crude runs through the Strait of Hormuz, which was effectively closed.
Two tankers in Iraqi waters were reportedly hit on Thursday as Iran increases its efforts to obstruct supplies throughout the region. Following Baghdad’s announcement that it was reducing production due to the situation, Saudi Arabia and Kuwait followed suit.
WTI surged at slightly under $96, while Brent reached a peak of $101.59 per barrel. On Monday, the two had increased by up to 30%, reaching a high of around $120. They both shared the gains, but analysts cautioned that $90 to $100 a barrel might become the new normal for some time since tensions don’t appear to be ending. Iran threatened any ships from the US or its allies, claiming it was prepared for a protracted battle of attrition that would “destroy the global economy.
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