Summary: Iran's Revolutionary Guard has threatened to block all oil shipments through the Strait of Hormuz, warning that oil prices could reach $200 per barrel due to the resulting insecurity. In response to the strait's closure and market turmoil, the International Energy Agency and its member countries are releasing 400 million barrels of oil from emergency reserves to stabilize prices. The situation has caused major disruptions to global energy supplies and shipping, raising fears of a prolonged crisis.
Main Topics Covered:
1. Iran's threat to block the Strait of Hormuz and its impact on global oil prices.
2. The international release of strategic oil reserves to counter market disruption.
3. The ongoing regional conflict and attacks on shipping in the Strait.
4. Concerns about a major global energy and shipping supply crisis.
Not ‘a litre of oil’ to pass Strait of Hormuz, expect $200 price tag: Iran
Warning comes as 400 million barrels of oil are being released from global reserves during waterway’s closure.
Iran’s Islamic Revolutionary Guard Corps (IRGC) says it will not allow “a litre of oil” through the Strait of Hormuz as the closure of the key Gulf waterway continues to roil global energy markets during the US-Israeli war on Iran.
A spokesperson for the IRGC’s Khatam al-Anbiya Headquarters said on Wednesday that any vessel linked to the United States and Israel or their allies “will be considered a legitimate target”.
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“You will not be able to artificially lower the price of oil. Expect oil at $200 per barrel,” the spokesperson said in a statement. “The price of oil depends on regional security, and you are the main source of insecurity in the region.”
Global oil prices have fluctuated wildly this week during continued US-Israeli attacks against Iran, which has retaliated by firing missiles and drones at targets across the wider Middle East.
The closure of the Strait of Hormuz, through which about one-fifth of the world’s oil supplies transit, and production slowdowns in some Gulf countries have raised concerns of further disruptions.
Concerns around the duration of the war, which began on February 28 and has shown no sign of abating, are also adding to uncertainty, sending oil prices soaring.
On Wednesday, three ships were hit by projectiles in the Strait of Hormuz, maritime security and risk firms said, including a Thai-flagged cargo vessel that came under attack about 11 nautical miles (18km) north of Oman.
Release of oil reserves
World leaders, including members of the Group of Seven (G7) and the European Union, have been mulling what action to take in response to the war’s impact on global economies.
Christian Bueger, a professor of international relations at the University of Copenhagen and an expert in maritime security, said Europe will be facing “a major energy supply crisis” if the Strait of Hormuz is not reopened.
“For the shipping industry right now, it’s impossible to go through the Strait of Hormuz,” Bueger told Al Jazeera. “And if there are not stronger signals in the near future that they can at least try to go through the strait, then we are looking at a major shipping crisis, which can last weeks if not months.”
On Wednesday, the International Energy Agency (IEA) announced that its 32 member countries had unanimously agreed to release 400 million barrels of oil from their emergency reserves to try to lower prices.
“This is a major action aiming to alleviate the immediate impacts of the disruption in markets,” IEA Executive Director Fatih Birol said during an address from the agency’s headquarters in Paris.
“But to be clear, the most important thing for a return to stable flows of oil and gas is the resumption of transit through the Strait of Hormuz,” he added.
The reserve supplies will be made available “over a timeframe that is appropriate” for each member state, the IEA said in a statement without providing details.
German Economy and Energy Minister Katherina Reiche said earlier in the day that the country would comply with the release while Austria also said it would make part of its emergency oil reserve available and extend its national strategic gas reserve.
Meanwhile, Japan’s Ministry of Economy, Trade and Industry said it would release about 80 million barrels from its private and national oil reserves.
Japanese Prime Minister Sanae Takaichi said the country, which gets about 70 percent of its oil imports through the Strait of Hormuz, would begin releasing the reserves on Monday.
Meridiano
