Oil Prices Surge Beyond $100: What Iran’s Attacks and IEA Stockpile Release Mean for Your Investments and Business in Oman
Oil prices surged back above $100 per barrel on Thursday as renewed Iranian attacks on Middle Eastern oil supplies and warnings of a global economic downturn overshadowed a record strategic oil release by the International Energy Agency (IEA).
The US-Israel campaign against Iran entered its third week without signs of abating, with Tehran escalating retaliatory strikes across the Gulf region. On Wednesday, the IEA announced its decision to release 400 million barrels of oil from strategic reserves—the largest ever—of which 172 million barrels come from the United States. Despite this unprecedented move, concerns remain over severe disruptions to energy flows, particularly as the Strait of Hormuz, a vital artery for one-fifth of the world’s crude oil, remains effectively closed.
Iran intensified efforts to disrupt supplies across the region. On Thursday, two tankers in Iraqi waters were reported hit. Iraq had previously announced production cuts due to the crisis, with Kuwait and Saudi Arabia also reducing output. Additionally, Bahrain reported an Iranian attack on its fuel tanks, while Saudi Arabia intercepted drones targeting the Shaybah oil field.
Both major crude benchmarks soared significantly. Brent crude surged over 9% to a peak of $101.59 per barrel, while West Texas Intermediate (WTI) climbed to just under $96. Earlier in the week, the prices had spiked nearly 30%, approaching $120 per barrel. Analysts now warn that prices between $90 and $100 per barrel may become the new normal amid ongoing hostilities.
Iran has declared readiness for a prolonged war of attrition that it threatens will “destroy” the global economy, following attacks on commercial vessels and warnings against US and allied ships. On Wednesday, Revolutionary Guards officials threatened strikes targeting economic centers and banks linked to US and Israeli interests. Ali Fadavi, an adviser to the Guards’ commander-in-chief, warned that the US and Israel should brace for a long-term conflict with devastating economic consequences.
The disruption in shipping through the Strait of Hormuz, which also transports about one-third of global fertilizer supplies, risks severe economic damage, especially in Asia and Europe. Airlines face significant challenges due to increased fuel costs and altered flight routes; Air New Zealand announced it would cut 1,100 flights over the next two months.
The spike in oil prices has reignited inflation fears and raised concerns that central banks, having recently considered easing interest rates, may now need to hike them again. This uncertainty has weighed heavily on global stock markets, with major indices across Tokyo, Hong Kong, Shanghai, Sydney, Seoul, Bangkok, Wellington, Singapore, Taipei, Manila, and Jakarta all closing sharply lower.
Market experts emphasize that the IEA’s emergency oil release is largely symbolic amid the geopolitical risks. Stephen Innes of SPI Asset Management likened it to “pointing a garden hose at a refinery blaze,” acknowledging that while it may temporarily reduce volatility, it cannot alter the fundamental risks while the world’s critical shipping routes remain under threat.
Neil Wilson of Saxo Markets noted that the IEA’s release was mostly priced in earlier, helping oil prices fall below $100 earlier in the week, aided also by former US President Donald Trump’s statements on a swift end to the conflict. Wilson estimated the war has already resulted in the loss of around 200 million barrels of oil. He cautioned that shifting reserves between locations is not equivalent to producing new oil, emphasizing market concerns about supply flows rather than stockpiles.
Despite this, Trump reiterated that the strikes have effectively defeated Iran, claiming, “We’ve won… we won—in the first hour it was over.” Meanwhile, Israeli military forces indicated the campaign is ongoing, with a “broad bank of targets” still available.
Market figures at approximately 03:30 GMT showed West Texas Intermediate up 8.6% at $94.72 per barrel and Brent crude up 9.0% at $100.29 per barrel. Major global stock indices continued to retreat, with Tokyo’s Nikkei 225 down 2.1%, Hong Kong’s Hang Seng down 1.2%, and Shanghai Composite down 0.6%.
Currency markets reflected ongoing uncertainty, with the euro down to $1.1537 and the pound to $1.3370 against the dollar, while the dollar rose slightly against the yen to 159.03.
In New York and London, equities closed lower, with the Dow down 0.6% at 47,417.27 and the FTSE 100 down 0.6% at 10,353.77.
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The surge in oil prices above $100 amid ongoing Middle East tensions signals heightened volatility and supply risks for Oman’s energy-dependent economy. Businesses should prepare for elevated costs and potential disruptions, while smart investors could explore opportunities in energy security and alternative sectors to hedge against prolonged instability. Strategic foresight and diversification will be crucial as the geopolitical risks suggest a prolonged high-price environment in global oil markets.
