Global oil markets plunged into chaos on Thursday as crude prices surged past the key $100-per-barrel level, fueled by intensifying Iranian attacks on Middle East energy infrastructure and shipping.
This came despite an unprecedented release of strategic petroleum reserves by the International Energy Agency (IEA), highlighting the limits of emergency stockpiles in the face of a direct threat to one of the world’s most vital energy arteries.
Brent crude, the international benchmark, climbed more than 9% during trading to reach as high as $101.59 per barrel before settling around $100.29, while West Texas Intermediate (WTI) rose 8.6% to $94.72.
The spikes followed a volatile week in which prices had briefly touched nearly $120 on Monday amid peak panic, then eased somewhat on expectations of diplomatic progress or reserve drawdowns—only to rebound sharply as fresh incidents underscored the ongoing risks.
The catalyst remains the intensifying U.S.-Israeli military campaign against Iran, now entering its third week with no clear off-ramp in sight. Tehran has responded with a sustained campaign of retaliatory strikes, including missile and drone attacks on commercial vessels and regional oil facilities.
On Thursday alone, reports emerged of two tankers struck in Iraqi waters, an attack on fuel storage tanks in Bahrain, and intercepted drones targeting Saudi Arabia’s Shaybah oil field. Iraq, Kuwait, and Saudi Arabia, the world’s largest oil exporter, have all announced production cuts in response to the deteriorating security environment.
Most critically, the Strait of Hormuz, the narrow chokepoint between the Persian Gulf and the Arabian Sea, remains effectively impassable for commercial traffic. Roughly one-fifth of global seaborne crude oil and a significant portion of liquefied natural gas transit this waterway under normal conditions.
Iranian forces, including the Islamic Revolutionary Guard Corps (IRGC), have vowed to prevent “even one liter” of oil from passing for the benefit of the United States, Israel, or their allies, backing the threat with attacks on merchant ships and mining risks. Traffic has plummeted to near zero, with insurers withdrawing coverage and shipowners rerouting or halting voyages entirely.
In a coordinated bid to blunt the supply shock, the IEA announced Wednesday that its member countries would unlock a record 400 million barrels from emergency reserves—the largest such release in history—with the United States contributing 172 million barrels. IEA Executive Director Fatih Birol emphasized the move aimed to “alleviate immediate impacts” but cautioned that only the resumption of safe passage through the Strait could restore true market stability.
Analysts were quick to describe the release as largely symbolic: a “garden hose pointed at a refinery blaze,” in the words of SPI Asset Management’s Stephen Innes. Reserves address inventory shortfalls but cannot replace disrupted daily flows from the Gulf, where roughly 20 million barrels per day are normally exported.
Iranian officials have embraced the economic warfare dimension. IRGC adviser Ali Fadavi warned on state television that the U.S. and Israel should prepare for a “long-term war of attrition” capable of devastating the American and global economies.
Tehran has threatened strikes on “economic centers and banks” tied to U.S. and Israeli interests while firing on commercial vessels and signaling readiness for prolonged disruption. Some Iranian spokespeople have even boasted that oil could reach $200 per barrel if the blockade persists.
The ripple effects are already severe. Beyond energy, the strait carries about a third of global fertilizer shipments, raising alarms for food security in import-dependent regions. Asian and European economies face particular vulnerability. Airlines are reeling from skyrocketing jet fuel costs and airspace restrictions; Air New Zealand announced Thursday it would cancel 1,100 flights over the next two months as it reconfigures routes.
Financial markets reflected the unease: major Asian indices—from Tokyo’s Nikkei 225 (down 2.1%) to Hong Kong‘s Hang Seng and others across the region—closed sharply lower. Wall Street’s Dow and London’s FTSE 100 each shed around 0.6% in prior sessions, with fresh inflation fears prompting speculation that central banks may delay rate cuts—or even resume hikes—after recent dovish signals.
As one Saxo Markets analyst noted, much of the IEA action had already been anticipated and “priced in,” contributing to earlier pullbacks. Former President Donald Trump, whose administration has been closely associated with the strikes, insisted Iran was “pretty much at the end of the line” and declared victory “in the first hour.” Yet Israel’s military indicated a “broad bank of targets” remained, suggesting the conflict—and its energy market stranglehold—could drag on.
For now, traders and consumers alike brace for a new reality: $90–$100 oil as the baseline until the geopolitical fire in the Gulf is extinguished. The geometry of risk, as Innes put it, has shifted decisively, and no stockpile release can fully redraw the map.
WHAT YOU SHOULD KNOW
Oil prices have surged back above $100 per barrel because the Strait of Hormuz, the chokepoint for one-fifth of the world’s crude, is effectively shut down by Iran’s ongoing attacks and threats in the escalating U.S.-Israel conflict.
Despite the IEA’s record 400-million-barrel reserve release, emergency stockpiles cannot replace disrupted daily flows through this critical artery. Until safe passage resumes, $90–$100 oil is likely the new baseline, with severe knock-on effects for inflation, shipping, food security, and global growth.
