Oil prices fell in Asian trade on Wednesday after the Wall Street Journal reported the International Energy Agency was planning its largest ever emergency oil reserve release to offset the impact of the Iran war.
Brent oil futures for May fell nearly 1% to $86.93 a barrel, while West Texas Intermediate crude futures fell 0.5% to $83.07 a barrel by 00:55 ET (05:55 GMT). Oil prices swung wildly in the minutes following the WSJ report, before steadily trending lower.
IEA plans largest ever reserve release amid Iran turmoil
The WSJ reported that the IEA had proposed releasing a record amount of oil, with member countries set to consider the proposal on Wednesday.
The emergency reserve release is expected to be larger than the record 182 million barrels of oil released in 2022, during the onset of the Russia-Ukraine war.
The IEA release is aimed at countering increased disruptions in oil markets caused by the near complete closure of the Strait of Hormuz by Iran. The strait is a key shipping lane that facilitates about 20% of the world’s oil supply.
A massive IEA release could help limit some supply disruptions stemming from the U.S.-Israel war with Iran. But an extended closure in the Strait of Hormuz stands to severely disrupt oil and gas supplies to several parts of Asia.
Reports showed Iran attacking ships passing through the Strait this week, and that Tehran had also mined the channel.
Iran has signalled that it will allow passage through the Strait only after U.S. and Israeli attacks against the country are stopped.
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