By Nora Redmond and Myra P. Saefong
Group of Seven energy ministers are considering the release of petroleum from reserves.
Oil futures fell sharply on Tuesday, extending losses from the overnight session, as world leaders consider releasing emergency crude supplies as the Iran conflict stretches into an 11th day.
“The conflict in Iran remains a developing story with no clear end in sight,” Kenny Zhu, a research analyst at Global X, said in emailed commentary. “While we don’t profess to know when disruptions to the Strait of Hormuz will end or how the conflict will resolve, the result has been heightened volatility in energy markets and the rerouting of global oil and gas cargos.”
West Texas Intermediate crude for April delivery (CL.1) (CLJ26) dropped more than 10% to $85.18 a barrel on the New York Mercantile Exchange, while May Brent crude (BRN00) (BRNK26) on ICE Futures Europe also dropped over 10%, to $88.79 per barrel.
Prices for both grades of crude on Monday had touched intraday highs near $120 a barrel before pulling back but still settling at their highest levels since August 2022.
Read: Oil prices see biggest daily swing since April 2020
The retreat from session highs on Monday came after CBS reported that U.S. President Donald Trump had said the war in Iran would be over “very soon.” However, the timing of a potential end to the conflict remains unclear, with Trump later saying in a speech to House Republicans in Florida: “We’ve already won in many ways, but we haven’t won enough.”
Read: Trump announces sanctions relief to ease oil prices, says Iran war to end ‘very soon’
Meanwhile, International Energy Agency Executive Director Fatih Birol said the IEA would hold an extraordinary meeting Tuesday to “assess the current security of [oil] supply and market conditions.” It will also decide on whether to make emergency reserves of IEA countries available to the market. That follows a discussion Monday by Group of Seven ministers who were considering a coordinated release of petroleum supplies through the IEA.
Analysts at J.P. Morgan led by Andrew Tyler, head of U.S. market intelligence, wrote in a note that relief to risk markets has come from two developments: first, the White House’s initial signal of de-escalation arising from Trump’s comments about the war ending, and second, the G-7’s consideration of making 300 million to 400 million barrels of oil available.
Goldman Sachs has estimated that Brent crude prices could hit between $72 and $76 per barrel in a scenario where exports from the Persian Gulf are down 15 million barrels per day for 30 days. If exports are down by the same amount for 60 days, the banking giant has forecast prices to settle at between $89 and $93 a barrel.
Jim Reid, global head of macroeconomic research and thematic strategy at Deutsche Bank, noted that investors will be “keenly watching” for signs that exports via the Strait of Hormuz can increase from the current mostly suspended levels, especially because on Monday, Saudi Arabia joined the United Arab Emirates and Kuwait in cutting oil production.
“We will also be watching whether plans to release oil reserves materialize,” he added.
Analysts at Commerzbank wrote that Trump is also considering several options amid continued disruptions to the supply of oil. “These include releasing emergency stockpiles, a pause to federal gas tax, and the U.S. Treasury Department’s involvement in the oil futures market,” they said.
-Nora Redmond -Myra P. Saefong
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03-10-26 1301ET
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