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Workers carry sacks of rice at Paco Market in Manila yesterday. Rising fuel prices have affected the cost of transportation and logistics, contributing to the higher prices of food and other essential goods.
EDD GUMBAN
MANILA, Philippines — Falling briefly after reports came out that the International Energy Agency (IEA) would release oil reserves, crude prices rebounded yesterday as markets expressed doubts the plan would push through and offset potential supply shocks from the US-Israeli conflict with Iran.
The IEA’s proposed drawdown would exceed the 182 million barrels of oil that IEA member countries put onto the market ?in two releases in 2022 when Russia launched its full-scale invasion of Ukraine, the Wall Street Journal said, citing officials familiar with the matter.
In ?a note to clients, Goldman Sachs analysts said that a stockpile release of that size would offset 12 days of the ?investment bank’s estimated 15.4 million barrel-per-day Gulf exports disruption.
Brent futures traded up 59 cents, or 0.7 percent, at $88.39 a barrel. United States’ West Texas Intermediate (WTI) traded 98 cents higher, or 1.2 percent, at $84.43 a barrel.
Both contracts extended losses in early Asian trade, after plunging more than 11 percent on Tuesday, despite US crude prices leaping five percent at the market’s opening.
Some analysts were skeptical about the IEA’s proposal and its impact on oil prices.
“Moves like IEA SPR release are not the solution to the crisis. How oil prices will evolve will depend on the duration of the Iran war,” said DBS ?energy sector team lead Suvro Sarkar.
Near-term upside price risks would be “reined in through periodic strategic signaling moves like we have seen over the past couple ?of days to calm markets down,” Sarkar added.
Officials of G7 have also gathered online to discuss a potential release of emergency oil stockpiles to soften the market blow.
Ahead of the market’s initial positive reaction to the IEA report, oil prices tanked on Tuesday after US President Donald Trump said war on Iran was “going to be ended soon” and it emerged that the Group of Seven developed nations would discuss tapping stockpiles.
Trump has repeatedly said the US is prepared to escort tankers through the Strait of Hormuz when necessary. However, sources told Reuters the US Navy has refused requests from the shipping industry for military escorts as the risk of attacks is too high for now.
Fears that the conflict could drag on for some time -- choking off energy supplies -- sent both main crude contracts soaring on Monday to within a whisker of $120 a barrel, the highest since 2022. Gas prices also rocketed. French President Emmanuel was scheduled on Wednesday to host ?a video call with other G7 country leaders to discuss the impact of the conflict in the Middle East on energy and measures to address the situation.
In New York, where is on a working visit, President Marcos said his administration is considering sourcing fuel from other countries that are not traditionally suppliers of local fuel, with no end in sight yet to the Middle East crisis.
The Department of Energy is seeking legislative approval to allow the importation of cheaper biofuels – a move officials say is necessary to temper “painful” fuel price hikes but which – local producers warn – could destroy the domestic industry.
