Global energy prices swung sharply on March 24 even as the United States (US) moved to stabilise markets, with US Energy secretary Chris Wright announcing emergency oil releases while crude rebounded toward the $100-per-barrel mark amid uncertainty over a possible pause in the Iran conflict.
Speaking at the annual CERAWeek conference in Houston, Wright said Washington would release 1 million to 1.5 million barrels per day (bpd) from the Strategic Petroleum Reserve to counter supply disruptions triggered by the war involving the US, Israel and Iran.
“It’s going to be between a million and a million and a half barrels a day out of U.S. stocks,” Wright told CNBC, in an interview, adding that combined emergency releases from global partners could reach nearly 3 million bpd.
More than 30 members of the International Energy Agency (IEA) have already agreed to inject 400 million barrels of oil into the global market to cushion the supply shock.
The intervention comes as markets react to conflicting signals over a potential de-escalation. US President Donald Trump said Washington would pause strikes on Iranian energy infrastructure for five days to allow talks, but Tehran rejected reports of negotiations, keeping traders on edge.
Oil markets have been highly volatile since the conflict erupted on February 28, with tanker traffic through the Strait of Hormuz, a-33-km-narrow corridor that normally carries about 20 per cent of global oil and LNG supplies, sharply reduced following Iranian attacks on commercial vessels.
Wright described the disruption as a short-term supply shock, saying prices had not yet risen high enough to significantly curb global demand.
“Markets do what markets do,” he said. “Prices went up to send signals to everyone that could produce more, please produce more.”
· Brent Crude: $100.31-$102 per barrel, up roughly 3 per cent, after plunging 11-15 per cent the previous day
· West Texas Intermediate: About $88.92 per barrel, up around 3 per cent
· European natural gas: Dutch wholesale gas prices near €68 per megawatt hour, more than double pre-war levels
· US gasoline: Close to $4 per gallon, up more than $1 since the war began
· US diesel: Around $5.29 per gallon, roughly 40 per cent higher since the war broke out
Gas markets have been particularly sensitive after strikes hit major LNG facilities in the Persian Gulf, including Iran’s South Pars Gas Field and Qatar’s Ras Laffan Industrial City, raising concerns about long-term supply disruptions.
The IEA has warned that if hostilities continue, the current shock could rival historic disruptions such as the 1973 oil crisis.
Roughly 10-12 million barrels per day (bpd) of global oil supply, about 12 per cent of world demand, is currently offline due to strikes on energy facilities and halted exports. Shipping through the Strait of Hormuz, through which roughly 20 per cent of global oil and gas flows normally pass, has also been severely constrained.
In response, the IEA on March 11 agreed to release a record 400 million barrels of crude from emergency stockpiles, the largest coordinated drawdown in the agency’s history, to stabilise markets.
But the agency warned that supply-side interventions alone would not be enough to cushion consumers from rising energy costs.
The IEA proposed a range of demand-side actions that could quickly reduce oil consumption. These include encouraging remote work to cut commuting fuel demand, lowering highway speed limits by at least 10 km per hour, shifting travellers from private vehicles to public transport and introducing car-sharing and eco-driving practices.
Other recommendations include limiting business air travel where alternatives exist, diverting LPG use away from transport to prioritise cooking needs and encouraging the adoption of electric cooking solutions where feasible.
Industry can also help ease the strain by switching petrochemical feedstocks where possible and implementing short-term efficiency measures to reduce oil consumption.
IEA also emphasised accelerating the shift to electric mobility as a structural way to reduce exposure to oil shocks. In its recommendations, the agency said governments should speed up the adoption of electric vehicles, particularly two- and three-wheelers, and expand charging infrastructure to curb oil demand in the transport sector, which accounts for nearly half of global oil consumption. Faster electrification of road transport, it said, would not only reduce fuel use during the current crisis but also strengthen long-term energy security by lowering dependence on volatile global oil markets.
Environmental groups protesting outside CERAWeek said the turmoil highlights the risks of dependence on fossil fuels.
Allie Rosenbluth, US campaigns manager at Oil Change International, said rising prices show how reliance on oil markets amplifies geopolitical crises.
“As long as our energy system relies on volatile fossil fuel markets, conflicts will continue to drive instability, price shocks and corporate profiteering,” she said. “The real path to energy security and resilience is a transition to affordable renewable energy.”
Meanwhile, Indonesia has committed to implement the national electrification programme by developing renewable energy sources, particularly solar (100 GW of solar panels) and geothermal ones amid global dynamics that demand stronger energy resilience and independence.