Oil Prices Surge Again, Returning Above $100: Record Strategic Reserves Release Fails to Help, Panic Sentiment Dominates Market

The International Energy Agency’s unprecedented coordinated release of reserves failed to calm the market as expected, instead fueling panic. On March 12, international oil prices surged again, with U.S. WTI crude futures jumping 9.72% for the day to close at $95.73 per barrel; global benchmark Brent crude futures rose 9.22%, closing at $100.46 per barrel. This was the first time Brent closed above the psychological $100 mark since August 2022. During Asian trading hours on March 13, the rally continued.

On March 12, the IEA released a report stating that due to escalating tensions in the Middle East, shipping through the Strait of Hormuz has nearly halted, leading to the largest-ever disruption in global oil supply. The day before, the IEA announced that 32 member countries had unanimously agreed to release 400 million barrels from strategic reserves to mitigate the impact of the Middle East tensions on oil supply and prices. The agency emphasized in the report that while emergency reserves provide a buffer, long-term market stability still depends on the duration of the conflict and the speed of shipping route recovery.

Such a large-scale release of reserves did little to ease market anxiety and instead ignited another surge in oil prices.

Why did a multilateral effort to stabilize oil prices turn into “adding fuel to the fire”? “The core issue has long gone beyond simple supply and demand arithmetic; it’s a systemic crisis related to global oil liquidity,” said Zhong Jian, senior researcher at 52HZ Shipping Research Institute. He explained that the market’s true demand is for stable, predictable daily oil “flows,” not a one-time injection of “stockpiles.” “Stockpile injections” cannot resolve the fundamental blockage of the main route, the Strait of Hormuz.

Zhong Jian believes that current fluctuations in international oil prices can be broken down into three dimensions: $80 to $90, mainly reflecting “war risk premiums,” which stem from geopolitical uncertainties and tend to quickly recede as tensions ease; $90 to $110, indicating the market has entered a “supply disruption pricing” phase, where traders start pricing in actual supply interruptions, and if shipping through the Strait of Hormuz remains blocked, this price level will be further reinforced; above $110 to $120, representing “financial valuation pricing,” which occurs only if there is a revolutionary change in Middle Eastern geopolitics that triggers a fundamental reassessment of oil assets globally. “As long as the Strait of Hormuz remains essentially blocked, oil prices are very likely to establish a stable platform between $90 and $110.”

While American consumers face sharply rising gasoline prices and inflation pressures, President Trump boasted on social media that high energy prices are a “benefit” for the U.S. “The U.S. is the world’s largest oil producer, so when oil prices go up, we make a lot of money,” he said.

Market reports indicate that the U.S. Department of the Treasury is considering measures to lower oil prices, including intervention in futures markets. The Financial Times reported that Teri Duffy, CEO of the Chicago Mercantile Exchange (CME), which manages U.S. oil futures trading, warned that if the Trump administration attempts to curb rising crude prices through market intervention, it could trigger an “epic disaster.” “Markets do not like government interference in price setting,” he said. “If the government takes such actions, investors may lose confidence in the market’s ability to set prices for key commodities.”

According to Xinhua, Iran’s new Supreme Leader, Mujtaba Khamenei, issued his first statement after taking office on March 12, saying Iran will not abandon revenge and will continue to use the blockade of the Strait of Hormuz as a tool, calling on regional neighbors to close U.S. military bases as soon as possible. Iranian Deputy Foreign Minister Ravanji told media that Iran allows ships from some countries to pass through the Strait of Hormuz, but countries involved in aggression against Iran do not have “safe passage rights” through the strait. He also stated that Iran has not laid mines in the waters of the Strait of Hormuz.

On March 12, WTI crude futures briefly surged over 10%, reaching $98 per barrel. However, after Iran’s limited openness to navigation, prices sharply retreated. On March 13, during Asian trading hours, WTI rose slightly and was trading at $97.08 per barrel.

U.S. Energy Secretary Chris Wray told U.S. media that the U.S. is “not yet prepared” to escort oil tankers through the Strait of Hormuz.