Oil falls back, Iraq and Ormuz in focus
Around 06:30 GMT, the West Texas Intermediate (WTI) barrel, the American reference, was down 4.26% at $92.11.
The Brent barrel from the North Sea, the global market benchmark, dropped 2.82% to $100.50. Both retreated after rising by about 3% the day before.
As the conflict in the Middle East entered its 19th day, investors remain attentive to developments in the war and their consequences for global oil supply.
Soaring fuel prices: here is how much the state collects from the increase in VAT revenues
On Wednesday, Iraq announced the resumption of a fraction of its oil exports, 250,000 barrels per day (bpd) transported by pipeline to a Turkish port, following an agreement with the autonomous Iraqi Kurdistan authorities.
A notable signal even if it is only a small part of the 3.5 million bpd that this founding member of OPEC exported before the conflict.
Blockage of 400 million barrels
Furthermore, after the International Energy Agency (IEA) member countries decided to release 400 million barrels from their strategic reserves, the operation began this week with the opening of Japanese stocks and should accelerate towards the end of the month.
Finally, operators are watching American efforts to try to unblock traffic in the Strait of Hormuz, through which a fifth of world oil typically transits.
The US has “successfully” bombed Iranian anti-ship missile sites near the strait.
However, “in the absence of a prospect of an end to hostilities, as the number of blocked ships increases daily and the strait is technically closed, Brent is expected to move permanently within a new range of between $95 and $110,” warned Robert Rennie, from Westpac Banking, cited by Bloomberg.
IEA announces largest ever release of strategic oil stocks
Indeed, the situation remains uncertain: while Tehran confirmed on Tuesday evening the death of its security chief Ali Larijani, the Iranian Parliament President warned that the Strait of Hormuz would not return to its pre-war operation, without further details.
The market also watches for strikes targeting the oil infrastructure of Gulf countries. The oil industrial zone of Fujairah, on the east coast of the United Arab Emirates, was hit by a new drone attack on Tuesday.
Optimistic Asian markets, waiting for the Fed
At the Tokyo Stock Exchange, the Nikkei main index closed up 2.86% at 55,239.40 points, and the broader Topix index up 2.49%.
At the Seoul Stock Exchange, the Kospi index surged over 5%. Taipei rose 1.51%, Sydney 0.31%. The Hong Kong Hang Seng index was up 0.80% around 06:30 GMT.
Investors, invigorated by the drop in oil prices, took advantage while waiting for a decision from the US Federal Reserve (Fed) later on Wednesday.
A status quo on rates seems assured, but “the market’s attention will focus on whether the monetary policy committee members will adjust their inflation forecasts, given the rise in oil prices,” note experts from broker Monex Securities.
ECB decisions expected
“Central banks’ task remains challenging, faced with a delicate balance between rising oil prices and the uncertainty surrounding the potential repercussions of a conflict in Iran, all coupled with the dynamics specific to each institution,” emphasizes Michael Wan, from MUFG.
More generally, “the correlation observed over the past two weeks – rise in oil and fall in stocks – is starting to crack, signaling that the market now favors a resolution scenario” based on the need for Donald Trump “to look for an exit door” in the Middle East, notes Stephen Innes, from SPI Asset Management.
The ECB must not “lower its guard” against inflation
With “the cautiously constructive tone in Asia,” the rebound in stocks “suggests that the market is actively choosing to ignore geopolitical noise rather than integrate it in advance,” he says.
The US currency fell 0.14% to 158.78 yen per dollar. Gold also slightly strengthened (+0.10%) to $5,010 per ounce.
