Reference News, March 14 report: According to AFP, March 12 report, major economies agreed to release record amounts of strategic oil reserves, but the move failed to calm investors, with oil prices surging above $100 per barrel on Thursday.

Iran's new round of attacks on energy infrastructure, along with concerns about a prolonged conflict, made this historic reserve release seem insignificant.

AFP will explain why this reserve release failed to ease worries in the oil market.

Scale is insufficient

The International Energy Agency (IEA) member states agreed on Wednesday to release 400 million barrels of oil reserves, the largest amount ever.

The IEA's move aims to alleviate the direct impact of the Middle East war on the energy market.

Just the United States, the world's largest oil consumer and producer, will gradually supply 172 million barrels of crude oil over three months, accounting for 40% of its current reserves.

However, analysts say the move is too small to offset the supply disruptions caused by the U.S. and Israeli attacks on Iran on February 28.

Commodity strategists at ING said the reserve release "falls far short of compensating for the supply losses in the Gulf."

The IEA said global crude oil production has decreased by at least 8 million barrels per day, with another 2 million barrels of oil-related products cut off.

Neil Wilson, an investment strategist at Saxo Bank UK, said: "The released reserves are unlikely to compensate for the loss in production."

"It's a temporary and limited solution — the key is to reopen the Strait of Hormuz, which is normally where about one-fifth of the world's crude oil passes through."

Infrastructure attacked

New rounds of Iranian attacks on energy targets in the Gulf region also pushed oil prices higher.

The IEA warned on Thursday that the war "is causing the most severe supply disruption in the global oil market in history."

Retaliatory missile and drone attacks have nearly halted shipping through the Strait of Hormuz.

Markets are also worried that energy infrastructure across the region may become military targets.

Bahrain said Iran attacked fuel tanks in Muharraq on Thursday, while drones attacked fuel tanks in Salalah port, Oman.

Saudi Arabia said it intercepted two drones heading toward its Shaybah oil field.

Meanwhile, due to a lack of storage capacity, oil giants in the Gulf region have had to reduce production.

Uncertain prospects of conflict

What unsettles the market even more is that the conflict could persist.

Although US President Trump said the war could end "soon," Iran warned that it might launch a long-term conflict that would "destroy" the world economy.

Jim Reid, an analyst at Deutsche Bank, said: "From the market perspective, the issue is that investors are increasingly factoring in the pricing of a protracted conflict that causes widespread economic losses."

The IEA warned: "There is no sign that hostilities are easing, and there is no clear schedule for the resumption of navigation through the strait." (Translated by Ge Xuele)

Original: toutiao.com/article/7617043862690791971/

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