Brent tops $100 as Iran tensions shake global oil markets

Global oil prices continued to climb on Thursday, March 12, despite a coordinated decision by major economies to release record volumes of crude from emergency reserves in an effort to soften the impact of the war involving Iran.

Benchmark Brent crude rose more than 9% during Asian trading, surpassing $100 per barrel. The surge came even after all 32 member states of the International Energy Agency (IEA) agreed to release a combined 400 million barrels of oil to ease supply concerns, as per foreign media reports.

On Wednesday, Iranian officials warned that oil prices could climb as high as $200 per barrel as attacks on shipping intensify in the Strait of Hormuz, a critical waterway for global energy shipments.

A spokesperson for the Islamic Revolutionary Guard Corps said vessels linked to the United States, Israel, or their allies would 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 Strait of Hormuz is one of the most strategically important shipping lanes in the world, with roughly one-fifth of global energy supplies typically passing through it.

IEA member countries account for roughly two-thirds of global energy production and consumption. The planned release of reserves exceeds the agency’s previous record by more than double. The earlier record drawdown occurred after Russian invasion of Ukraine in 2022.

Martin Ma of the Singapore Institute of Technology described the IEA decision as “historically significant,” but cautioned that it would likely provide only a temporary buffer for markets.

He added that oil prices are expected to remain elevated as long as supply risks persist, noting that the latest surge suggests traders anticipate a “prolonged” disruption.

Global oil markets have been highly volatile since the United States and Israel launched airstrikes on Iran on February 28. Earlier this week, Brent crude briefly approached $120 per barrel.

The surge has pushed fuel prices higher around the world. In the United States, the average price of gasoline rose above $3.50 per gallon on Tuesday, according to the American Automobile Association.

Many Asian economies—particularly those heavily dependent on Middle Eastern energy supplies—have been hit especially hard. Long lines formed at petrol stations in Philippines, Thailand, and Vietnam this week as motorists rushed to fill their tanks.

Authorities in Thailand have urged employees at most government agencies to work from home to conserve energy, while officials are being discouraged from non-essential overseas travel.

The Philippine government has also introduced a four-day work week for public sector employees in an effort to reduce energy consumption.

By Tamilla Hasanova