Oil futures ticked up into the high $80s per barrel on Wednesday after the Group of Seven nations agreed to release a combined 400 million barrels from the strategic petroleum reserve (SPR) — the bloc’s largest release on record — as violence continues to escalate around the Strait of Hormuz.
Futures on international benchmark Brent crude (BZ=F) rose roughly 3.7% through Wednesday morning to trade around $88.40 per barrel, while those on US benchmark West Texas Intermediate (WTI) crude (CL=F) gained about 5% to hover around $87.70.
Prices sank as news of the SPR release broke from the International Energy Agency, which coordinates such moves, but quickly rebounded in the minutes directly after to gain on the session.
Read more: What’s the Strategic Petroleum Reserve, and can it help lower gas prices?
The IEA said the coordinated release — its sixth on record, and the largest in the agency’s history — is intended to stabilize global energy markets amid mounting security risks at one of the world’s most critical oil-shipping chokepoints.
“The oil market challenges we are facing are unprecedented in scale, therefore I am very glad that IEA Member countries have responded with an emergency collective action of unprecedented size,” IEA executive director Fatih Birol said in a statement.
“Oil markets are global so the response to major disruptions needs to be global too,” he said.
The planned drawdown is more than double the IEA’s previous record release of 182 million barrels in 2022, following Russia’s full-scale invasion of Ukraine. IEA member countries currently hold roughly 1.2 billion barrels in government-controlled reserves, alongside about 600 million barrels in mandatory commercial inventories.
Despite the scale of the intervention, crude prices remained broadly firm as traders continued to focus on physical supply risks in the Persian Gulf.
A fresh wave of attacks on commercial vessels in and around the Strait of Hormuz on Wednesday, alongside reports that Iran may be placing mines throughout the 21-mile-wide waterway, has raised concerns that shipping disruptions could intensify in the coming days, potentially offsetting the impact of emergency stockpile releases.
Maritime risk firms reported that at least three additional vessels were struck by unidentified projectiles on Wednesday, bringing the total to at least 14 vessels struck since the war began, further delaying a growing backlog of tankers waiting to transit the region as insurers, shipowners, and energy traders reassess security conditions.