The price of oil rose above $100 overnight after Iran attacked oil tankers in the region - while the Israeli and US war on Iran showed no signs of abating. Early Thursday afternoon, the price was $98 a barrel.
The price of oil rose despite the fact that member countries of the energy agency IEA, which include the United States, have agreed to use oil reserves to dampen price increases that followed the Iran war. The 400 million barrels that will be released this way is the largest "reserve release" in history.
Short-term solution
The IEA says in its monthly report on the state of the oil market that it is a welcome addition but still only a short-term solution to replenish the supply of oil on the market. The disruptions that are now occurring are the worst so far since the start of the global oil market.
A voice in the market is more blunt about what the measure means. The release of oil reserves does little to allay concerns about the US and Israel's war with Iran and Iran's attacks on oil and gas infrastructure in Arab countries in the Persian Gulf, according to him.
Garden hose
In brokerage terms, it's like using a garden hose to put out a burning oil refinery, Stephen Innes at SPI Asset Management told the AFP news agency.
The US will contribute 172 million barrels from its strategic oil reserve to the 400 million that IEA members, including the US, will release. Sweden will contribute two million of the 400.
US Energy Secretary Chris Wright told CNBC that the US is not yet ready to escort tankers through the Strait of Hormuz, where 20 percent of the world's oil is transported. The US military is busy striking targets in Iran. But by the end of the month, escorts could begin, according to Wright.
In a post on his media platform, Truth Social, the American president writes that the United States makes a lot of money when oil prices rise. But it is of much greater importance and interest to him, as president, to stop Iran from acquiring nuclear weapons and devastating the Middle East.
Strait between Iran and Oman that is 33 kilometers wide at its narrowest point.
Iran and Oman have their territorial waters in the strait, but are subject to the right of transit passage under the Law of the Sea Convention.
It is important for crude oil transport from Saudi Arabia, Kuwait, Iraq, Qatar, Bahrain, the United Arab Emirates and Iran as it connects the Persian Gulf with the Gulf of Oman and the Arabian Sea.
The majority of oil shipments go to countries in Asia.
Source: NE, AP
