Oil prices surge close to $100: Iraq and Oman consecutively shut down major oil terminals, IEA's stockpiling plan overshadowed by panic

Bloomberg News has learned that after two oil tankers were attacked in Iraqi waters, Brent crude oil prices rebounded to around $100 per barrel, highlighting the broader risks faced by energy assets across the Middle East and overshadowing the record-breaking release of oil reserves by the International Energy Agency. Meanwhile, sources who directly received notifications from port agents revealed that Oman has evacuated all ships from the main oil export terminal at Mina Fahal as a precaution. Brent futures surged by as much as 8.28%, reaching $99.60 per barrel, and WTI crude also broke above $94 per barrel.

The head of Iraq’s port authority told local media that the country has suspended operations at all oil terminals following the attacks. The incident underscores the threats to regional shipping, not just the currently closed Strait of Hormuz.

After the near closure of the Strait of Hormuz, Iraq was among the first Persian Gulf oil producers to cut output, followed by Kuwait and Saudi Arabia. These cuts prompted the IEA to take action, coordinating the release of 400 million barrels of oil reserves — a historic move far exceeding the scale of releases after Russia’s invasion of Ukraine in 2022.

The U.S. announced plans to release 172 million barrels as part of a global effort to curb oil prices. The world’s daily oil consumption exceeds 100 million barrels, and Gulf producers have had to cut about 6%. Further reductions in the Middle East are possible.

Darrell Fletcher, Managing Director of Commodities at Bannockburn Capital Markets, said, “That’s my concern with the IEA report — it’s completely overlooked, and now prices are higher. This could send the wrong signals. What information do they have that we don’t?”

With the near closure of the Strait of Hormuz, which typically handles one-fifth of global oil supply, prices for crude oil, natural gas, and diesel have risen, fueling fears of an inflation crisis.

“The only real way to bring oil prices down is to reopen the Strait of Hormuz,” Neil Beveridge, research head at Sanford C. Bernstein & Co., said in an interview. He added that the release of strategic reserves is “insignificant” compared to the 20 million barrels per day lost due to the closure of the strait.

On Wednesday, oil prices rose amid escalating rhetoric from both sides. Iran told regional mediators that any ceasefire agreement must include guarantees from the U.S. that neither the U.S. nor Israel will attack Iran in the future. Washington is unlikely to accept these conditions, further dampening expectations for a quick end to the conflict.

In a speech Wednesday in Kentucky, Trump reiterated that the war is nearing its end but also hinted that the U.S. will stay until its objectives are achieved. “We don’t want to withdraw prematurely, right?” he told the audience.

Meanwhile, sources who directly received notifications from port agents revealed that Oman has evacuated all ships from the main oil export terminal at Mina Fahal as a precaution. Located outside the Strait of Hormuz, Mina Fahal is one of the few ports in the Middle East capable of exporting oil globally. However, attacks in the surrounding area have made nearby waters unsafe.

According to local media citing security officials, drones attacked fuel tanks at Oman’s Salalah port on Wednesday, with some drones intercepted, prompting authorities to issue evacuation orders. Reports indicate that the container and bulk cargo terminals at Salalah have suspended operations, while other Omani ports continue normal operations.

Oman’s evacuation efforts indicate that the Middle East crisis is escalating, now threatening oil transportation beyond the Strait of Hormuz. Although loading continues at the UAE’s Fujairah port (also outside the strait), some shipowners are avoiding the port due to fears of attack. Meanwhile, Saudi Arabia is transporting oil via a pipeline to its Red Sea coast port of Bunyah.

Data from analytics firm Kpler shows that Oman’s Mina Fahal oil field exports about 1 million barrels of crude daily. As of Wednesday’s close, the grade was priced at around $121 per barrel, well above the global benchmark Brent crude.