• WTI Oil prices remain broadly stable around $95.30 despite volatility driven by geopolitical tensions.
• Australia and Japan announce the release of significant volumes from strategic reserves to ease supply disruptions.
• Concerns over the closure of the Strait of Hormuz and global supply losses continue to support the Oil market.

West Texas Intermediate (WTI) US Oil trades around $95.30 on Friday at the time of writing, virtually unchanged for the day, as markets balance supply relief measures with escalating geopolitical risks in the Middle East.

Oil prices showed volatility after Australia’s Energy Minister Chris Bowen announced that the country would release up to 762 million litres of fuel from its strategic reserves. The move comes alongside a temporary easing of stockholding rules, allowing a reduction of up to 20% in minimum fuel storage requirements to help mitigate supply disruptions linked to the war involving Iran.

Japan has also announced plans to release about 80 million barrels of Oil from its strategic reserves, equivalent to roughly 45 days of supply. The measure is expected to begin on March 16 and will be coordinated with the G7 and the International Energy Agency (IEA). Japan relies heavily on the Middle East for its energy imports, with about 95% of its Oil sourced from the region and nearly 90% of shipments passing through the Strait of Hormuz.

Despite these efforts to stabilize the market, supply risks remain elevated. Escalating tensions involving the United States (US), Israel and Iran have effectively led to the closure of the Strait of Hormuz, a critical chokepoint for global Oil shipments.

The IEA estimates that supply disruptions could reach at least 8 million barrels per day, marking one of the largest outages ever recorded in the global Oil market. In response, industrialized countries within the IEA have announced a record release of around 400 million barrels from emergency reserves to help cushion the shock.

However, analysts at Commerzbank warn that such reserve releases offer only temporary relief. According to the bank, even spread over several months, the measure would only partially offset supply losses if the Strait of Hormuz remains fully closed.

Against this backdrop, the Oil market is likely to remain driven primarily by geopolitical developments. Several institutions note that as long as the conflict persists and risks to key energy shipping routes remain high, Oil prices should continue to find strong fundamental support.