Oil prices rose on fresh concerns about Middle East supplies before falling due to the potential release of more reserves. US financial markets have experienced volatility as fears in the bond market grow, pushing Treasury yields to their highest levels in over 20 years, while oil prices fluctuate despite the Nasdaq and S&P 500 reaching record peaks.
Wall Street closed lower on Wednesday as oil prices initially rose then fell due to renewed concerns about disruptions to Middle East supplies. Stocks declined after closing at record highs in the previous session on Tuesday, with yields on US government bonds climbing to 24-year highs as investors expressed concern about the impact of high oil prices on inflation and interest rates.
Oil prices initially increased on Wednesday following warnings that Iran appeared to be intensifying attacks on tankers in the Strait of Hormuz, before closing lower after the International Energy Agency (IEA) member states indicated their readiness to release more strategic reserves. The head of the IEA stated that member countries are prepared to release additional oil from their reserves if necessary, prioritizing diesel due to tight fuel supplies.
G7 countries, in coordination with the IEA, agreed last Friday to immediately release 100 million barrels of diesel and crude oil to alleviate global energy supply concerns stemming from the United States-Iran conflict. The latest announcement from the IEA helped stabilize oil markets after prices had risen on Wednesday following a report from UK Maritime Trade Operations.
The maritime agency reported on Tuesday that there had been nine attacks on tankers in the Strait of Hormuz this month, accounting for half of the total attacks in the waterway and the Gulf combined for September. US Secretary of State Marco Rubio reiterated Washington's claims that it was in control of the strait and that oil flows were near normal levels.
Oil exports from the Gulf have significantly recovered in recent days, despite a rise in attacks on ships around the Strait of Hormuz, according to maritime experts and trackers. Gulf oil flows, excluding Iran, recovered to more than 81 percent of pre-war levels in September, while crude exports from the wider Middle East exceeded pre-war levels on 14 days during the month, as reported by maritime intelligence firm Kpler.
However, this recovery has occurred alongside an increase in attacks on tankers, with shipping companies facing higher freight, insurance, and security costs. On Tuesday, 12 crew members on a Panama-flagged tanker were injured in an attack by an unknown projectile while crossing the Strait of Hormuz, according to a statement from India’s Ministry of External Affairs.