After climbing nearly 5% on Wednesday, crude oil temporarily topped $100 per barrel overnight due to increased attacks on ships in the Gulf, outweighing the International Energy Agency’s plan for a record release of reserves. One oil market index hit 2020 levels of volatility.
Iran, recognizing that an oil shock is one of its biggest defensive weapons, warned yesterday that the fight may push oil to $200 per barrel. The Islamic Republic appears unwilling to liberate Gulf shipping while the war continues.

Stock markets worldwide fell due to rising oil prices, with major U.S. indices flat to negative on Wednesday and Asian indexes reversing gains on Thursday. European and American stock futures fell before the bell.

The oil market’s shrug at the record 400-million-barrel reserve release is problematic and suggests a timeframe for traders.

The 400 million barrels, more than twice the release following the 2022 Ukraine invasion, would meet 2-4 weeks of world consumption. Markets may tighten if the war keeps closing down the Gulf.

Financial markets are focusing on anticipated inflation consequences and central bank responses due to the timetable.

Two U.S. interest rate cuts have almost disappeared from the Fed futures curve, with only one expected in 2026. February CPI inflation was as projected, but before the oil shock.