The wide gap between paper and physical prices suggests that supply is being immediately choked off.<\/p>\n But traders on the paper market appear to believe that the record-high emergency stocks release and the U.S. Administration\u2019s scrambling to calm the markets with comments that the war will end soon would ease the upward pressure on oil prices.<\/p>\n Analysts started expressing views that $200 oil is not a fantasy anymore\u2014with 20% of global oil supply choked at the Strait of Hormuz buyers are racing to procure physical cargoes, refiners in Asia consider cutting processing rates, and Asian countries restrict fuel exports.<\/p>\n As a result, jet and diesel cracks soared to never-seen highs, leaving entire regions such as Europe in a shocking shortfall of middle distillates.<\/p>\n Related: Little-Known US Company Lands Important Pentagon Contract in Rare Earth Race<\/a><\/p>\n Hours after announcing the biggest-ever coordinated emergency release of oil stocks, of\u00a0400 million barrels<\/a>, from reserves, the International Energy Agency warned that the Middle East war is creating the biggest supply disruption<\/a> in the history of the oil market.<\/p>\n The IEA-coordinated release will take weeks and possibly months to reach the market. The U.S. release<\/a> of stocks as part of the IEA action will take about 120 days to complete, ING\u2019s commodities strategists Warren Patterson and Ewa Manthey said<\/a>.<\/p>\n \u201cIf you assume a similar timeline for other countries, that works out to 3.3m b\/d \u2013 far short of the supply losses we are seeing from the Persian Gulf,\u201d they noted.<\/p>\n With limited capacity available to bypass the crucial Strait of Hormuz and storage filling up, Gulf producers have slashed their combined oil output by at least 10 million barrels per day, the IEA said<\/a> in its monthly Oil Market Report on Thursday.<\/p>\n In addition, over 3 million barrels per day of refining capacity in the Gulf region has already shut due to attacks and a lack of viable export outlets.<\/p>\n \u201cRuns elsewhere will be increasingly limited due to feedstock availability,\u201d the IEA warned.<\/p>\n The coordinated stocks release, while a record-high since the agency was created in the 1970s, wouldn\u2019t go far to help supply in most of developing Asia, where neither China nor India, the top crude importers, are IEA members. China has some buffer<\/a> to withstand part of the supply shock, but Indian stockpiles are among the lowest in the region.<\/p>\n The U.S. Treasury moved to allow<\/a>, until April 11, purchases of Russian crude stuck in tankers in floating storage. China and India will likely compete fiercely for this supply. And still, it will not come close to offsetting the massive loss of Middle Eastern supply, most of which goes to Asia.<\/p>\n Related: No Magnets, No Drones: How China Controls the Future of Warfare<\/a><\/p>\n \u201cAsia’s alternative crude supply sources are severely limited, with both China and India competing for Russian crude,\u201d said<\/a> Sushant Gupta, Research Director, Asia Pacific Refining and Oils at Wood Mackenzie.<\/p>\n \u201cAsian refiners will struggle to fulfil crude buying requirements for April, leading to run cuts across the region. Refiners will be dipping into their buffer stocks, which is typically up to 15 days of their needs,\u201d Gupta added.<\/p>\n \u201cEventually, most countries will need to fall back on strategic petroleum reserves if the conflict continues.\u201d<\/p>\n The conflict doesn\u2019t look to be ending soon, despite the Trump Administration\u2019s efforts to convince the market of the contrary and play down the spike in oil and gasoline prices.<\/p>\n Early this week, analysts at Wood Mackenzie said<\/a> that Brent Crude prices could surge to $150 per barrel in the coming weeks.<\/p>\n \u201cHowever, supply volumes at risk this time are dimensionally bigger \u2013 and real,\u201d unlike in the 2022 Russian invasion of Ukraine, when supply was free flowing and just had to redirect to China and India, according to WoodMac.<\/p>\n \u201cIn our view, US$200\/bbl is not outside the realms of possibility in 2026,\u201d the analysts said.<\/p>\n The Trump Administration is scrambling to contain the fallout on prices. Energy Secretary Chris Wright on Thursday told CNN that oil prices are unlikely to hit $200<\/a> per barrel, \u201cbut we are focused on the military operation and solving a problem.\u201d<\/p>\n![](\"https:\/\/www.newsbeep.com\/ca\/wp-content\/uploads\/2026\/01\/book.jpg\"\/)
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