FX.co ★ Oil Pressured by IEA Release News

WTI crude futures traded below $85 per barrel on Wednesday, extending the sharp losses from the previous session following reports that the International Energy Agency had proposed the largest release of strategic oil reserves in its history. The planned release would exceed the 182 million barrels the agency deployed in 2022 after Russia’s invasion of Ukraine.

Oil markets remained highly volatile amid growing uncertainty over the conflict involving Iran and the security of shipping through the strategic Strait of Hormuz. While former President Trump suggested the hostilities could end soon, U.S. officials signaled that military operations were in fact intensifying and that prospects for diplomatic talks were limited.

Market jitters were compounded when Energy Secretary Chris Wright mistakenly posted a message stating that the U.S. Navy had escorted an oil tanker through the narrow waterway near Iran. The White House later clarified that no such operation had occurred.

Meanwhile, major Middle Eastern producers have jointly cut output by more than 6 million barrels per day as the Strait of Hormuz remains effectively closed.