Daijiworld Media Network - Dubai

Dubai, Mar 16: Hundreds of oil tankers remain stranded on both sides of the strategically crucial Strait of Hormuz as Iran has effectively closed the waterway amid the ongoing conflict with Israel and the United States, pushing global oil prices above $100 per barrel for the first time since the Russia–Ukraine War began in 2022.

The vital shipping corridor, through which nearly one-fifth of the world’s oil supply passes, has seen tanker traffic plunge sharply after Israeli and US strikes on Tehran on February 28. The disruption has raised serious concerns for major energy-importing countries including India, China and Japan, along with several European economies that depend heavily on Gulf oil supplies.

In an attempt to stabilise the markets, the International Energy Agency (IEA) has announced the release of 400 million barrels of oil from emergency reserves — the largest coordinated drawdown in the agency’s history. However, the move has so far failed to bring down prices.

Earlier, the IEA had released around 182 million barrels following Russia’s invasion of Ukraine to help stabilise global energy markets.

According to the agency, oil shipments through the Strait of Hormuz have fallen to less than 10 percent of pre-war levels, posing a major threat to one of the most critical arteries of the global energy system. IEA member countries collectively hold about 1.25 billion barrels in government-controlled emergency reserves, along with nearly 600 million barrels in industry stocks tied to government obligations.

Despite these large reserves, experts say the release is insufficient compared with the scale of global energy demand.

Energy strategist Naif Aldandeni described the move as “a small bandage on a large wound”, noting that governments are scrambling to calm markets shaken by the war.

The US Energy Information Administration estimates that global consumption of petroleum and other liquids will average about 105.17 million barrels per day in 2026. At that rate, the 400 million barrels released would cover only around four days of global consumption.

Even compared with the usual flow through the Strait of Hormuz — about 20 million barrels per day — the emergency release equals only about 20 days of typical shipments.

Aldandeni said strategic reserves may temporarily calm market panic but cannot replace the vital role of a functioning shipping corridor.

Oil markets continue to reflect those concerns. Brent crude closed at $103.14 per barrel on Friday after briefly surging close to $120 as fears of supply disruption intensified.

Oil expert Nabil al-Marsoumi said the price surge is driven largely by geopolitical risk rather than supply fundamentals.

According to him, the closure of the Strait of Hormuz has added nearly $40 per barrel as a “geopolitical risk premium” over what market conditions would normally dictate.

The crisis has also raised concerns about energy infrastructure in the region. US President Donald Trump said American forces had carried out a major bombing operation targeting military sites on Kharg Island, though oil facilities were deliberately spared.

The United States Central Command confirmed that US forces struck more than 90 Iranian military targets on the island while avoiding damage to oil infrastructure.

Iran has warned that any direct attack on its energy facilities would trigger retaliation against oil infrastructure linked to the United States across the region.

Kharg Island serves as the primary export terminal for Iranian crude oil, making it a crucial component of the country’s energy supply network. Analysts warn that if the conflict escalates from blocking shipping to targeting oil infrastructure itself, the crisis could shift from a temporary supply disruption to a prolonged loss of production and exports.

Meanwhile, several regional energy companies have halted operations amid the escalating tensions. These include QatarEnergy, Kuwait Petroleum Corporation and Bapco, which have suspended production and declared force majeure. Major producers such as Saudi Aramco and ADNOC have also reportedly shut down some refinery operations.

Even under less severe scenarios where infrastructure remains intact but maritime disruption continues, experts say strategic reserves offer only limited relief.

The US Department of Energy said the country’s Strategic Petroleum Reserve held about 415.4 million barrels as of February 18, 2026, with a maximum release capacity of 4.4 million barrels per day. Oil released from the reserve typically takes around 13 days to reach markets after a presidential order.

Analysts warn that if disruptions persist in the Strait of Hormuz or spread to other critical chokepoints such as the Bab al-Mandeb Strait, global oil prices could climb even higher, posing a serious risk to the world economy.