Middle East Crisis - Oil Market

Sources: China Negotiates with Iran on Strait of Hormuz

China is negotiating with Iran on safe passage for tankers carrying both natural gas and oil through the Strait of Hormuz, according to sources to Reuters. 45 percent of the oil China uses is shipped through the strait.

During the night, the cargo ship Iron Maiden was able to pass through the strait after changing its status to “China-owned”.

400 million barrels of oil released to calm the chaos

The International Energy Agency will pump 400 million barrels of oil from the common oil reserve onto the market. The 32 member countries decided on Wednesday, according to Reuters.

– The challenges we face in the oil market are unprecedented in terms of scope, says IEA Director Fatih Birol in the press release.

It is by a wide margin the largest release in history. The level can be compared to the IEA's release after Russia's invasion of Ukraine, when 182 million barrels were released.

The oil market has been shaken up considerably since the war began and Iran began blocking the narrow key passage. Oil prices have also been on a roller coaster ride on Wednesday, but by lunchtime the price is back around zero. Brent oil now costs just over $90 a barrel.

Both Japan and Germany open oil reserves

Japan will start releasing oil from its strategic reserves from March 16, Prime Minister Sanae Takaichi said, according to NHK.

The announcement comes at a time when the country is dealing with the consequences of the war in the Middle East.

In parallel, the International Energy Agency (IEA) is considering a coordinated global release of oil reserves, which could be the largest to date. A decision could come later on Wednesday, according to Bloomberg.

Germany has also decided to use its oil reserves to dampen the rise in oil prices.

“We will contribute our share,” says German Economy Minister Katherina Reiche.
The oil crisis in Hormuz — that’s the point

Oljekrisen i Hormuz — det gäller saken

• Iran has closed the important Strait of Hormuz during the war. On Monday, oil prices peaked at almost $120 per barrel, but prices have since eased to below $90.
• Several major oil producers in the Middle East, including Iraq, Kuwait and the United Arab Emirates, have been forced to reduce production as their stocks fill up.
• The G7 countries and the International Energy Council have discussed releasing strategic oil reserves to dampen the price rise.
• The market has been characterized by extreme volatility with record price movements.
• Experts warn that a prolonged blockade of the Strait of Hormuz could cause a global energy crisis.