Oil price tops $100 a barrel - again

Oil prices continued to climb early on March 12, even after major economies agreed to release a record volume of crude from emergency reserves in an effort to mitigate the impact of the Iran conflict.

Brent crude rose almost 9% in early Asian trading, surpassing $100 a barrel, despite the International Energy Agency (IEA) announcing late on March 11 that all 32 member countries would release up to 400mn barrels of oil in response to supply concerns.

Tensions in the Strait of Hormuz have intensified in recent days with Iran warning that oil prices could reach $200 a barrel as attacks on commercial vessels linked to the US, Israel, or their allies continue. There is still a way to go before Brent returns to levels seen earlier in the week when it almost hit $120 a barrel.

According to the BBC, the IEA’s coordinated release is more than double its previous record, set following Russia’s invasion of Ukraine in 2022, and represents a temporary buffer rather than a long-term solution against rising prices.

In the short term at least, analysts expect prices to remain elevated while supply risks persist, reflecting market anticipation of a prolonged disruption. The surge in oil prices has already driven up fuel costs worldwide with countries in Asia, heavily dependent on Middle Eastern energy, having been particularly affected.

Long queues have been seen at petrol stations in the Philippines, Thailand, and Vietnam where prices continue to rise despite government efforts at using special subsidy funds to limit increases.