Oil prices rise despite deal to release record amount of reserves

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Osmond ChiaBusiness reporter

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Reuters

Long queues were seen at petrol stations in the Philippines

Oil prices continued to rise on Thursday despite major countries agreeing to release a record amount of oil from their emergency reserves as they try to curb the impact of the Iran war.

Brent crude was 6.9% higher at $98.33 (£73.43) a barrel in morning trading in Asia even after all 32 members of the International Energy Agency’s (IEA) said they will release 400 million barrels in response to supply concerns.

On Wednesday, Iran warned that oil could reach $200 a barrel as its attacks on ships intensify in the Strait of Hormuz, a key waterway for energy shipments.

An Islamic Revolutionary Guard Corps (IRGC) spokesperson said any vessel linked to the US, Israel or their allies will be targeted.

“You will not be able to artificially lower the price of oil. Expect oil at $200 per barrel,” the spokesperson said.

“The price of oil depends on regional security, and you are the main source of insecurity in the region.”

The narrow shipping route is crucial to the global economy as about a fifth of the world’s energy supplies usually passes through it.

IEA members represent around two thirds of global energy production and consumption.

The release of reserves is more than double the previous IEA record, which came after Russia’s invasion of Ukraine in 2022.

Global oil markets have been extremely volatile since the US and Israel launched airstrikes against Iran on 28 February, with Brent crude reaching almost $120 a barrel earlier this week.

That has pushed up fuel prices have around world.

In the US, the average price of petrol rose above $3.50 a gallon on Tuesday, according to the American Automobile Association.

Many countries in Asia, which are heavily reliant on energy from the Middle East, have been hit particularly hard.

Long queues were seen at petrol stations in the Philippines,Thailand and Vietnam this week as people raced to fill up with fuel.

Thai authorities have called for staff at most government agencies to work from home to conserve energy. Officials are also being discouraged from non-essential overseas travel.

The Philippines has also started a four-day work week for its government to help cut down on energy use.

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