Donna Dong
Research Analyst, Flux
Brent Recovers to $92.18/bbl
IEA plans record oil reserve release as Hormuz disruptions persist; force majeure spreads and Gulf energy infrastructure faces attacks.
The May’26 Brent futures contract has traded up this afternoon, briefly falling to $87.28/bbl at 14:00 GMT before recovering to $92.18/bbl at 16:55 GMT (time of writing).
In the news, the International Energy Agency (IEA) and its member countries have agreed to release a historic 400mb of crude oil from strategic reserves, as they aim to stabilise global energy markets amid ongoing disruptions caused by the Iran conflict, which continues to affect crude oil flows through the Strait of Hormuz. The coordinated action is the largest emergency oil release ever organised by the group and is only the sixth intervention since the IEA was founded after the oil shocks of the 1970s. Exact allocation details from each country have not been disclosed yet, but the release will be funded from reserves held by the IEA’s 32 member states, including the United States, Japan, South Korea, Canada, and most European economies. In other news, Shell has declared force majeure on LNG cargoes it purchases from QatarEnergy and sells to its clients worldwide; this follows QatarEnergy’s force majeure announcement last week. Elsewhere, Iranian drones targeted oil storage facilities at Oman’s Port of Salalah on Wednesday, representing the most recent assault on Gulf energy infrastructure. According to Omani state media, fuel storage tanks at the port were struck, though no merchant vessels were damaged. In Russia, Gazprom has reported aerial attacks on its facilities in southern Russia, including the Russkaya pumping station that exports natural gas via the TurkStream subsea pipeline to Europe, but has stated that all of these attacks were successfully prevented. Finally, at the time of writing, the front-month (May/Jun) and 6-month (May/Nov) Brent futures spreads are at $3.14/bbl and $14.91/bbl, respectively.
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