Brent crude oil prices climbed during Asian trading hours on Thursday, rising more than 10% from Wednesday's settlement price. The commodity was trading near $101 per barrel, marking an intraday gain of approximately 8.6%. The surge was driven by renewed market panic after Iraqi security officials confirmed that two foreign tankers carrying fuel oil were attacked and caught fire within Iraqi territorial waters. Preliminary investigations suggest the assault was carried out by vessels from Iran laden with explosives.

This attack is viewed as a direct and forceful response from Iran to the International Energy Agency's (IEA) announcement of a major coordinated release of strategic oil reserves, escalating global risks of supply disruption.

Two fuel oil tankers were attacked and set ablaze, with initial evidence pointing to explosive-laden Iranian boats. Iraqi security officials stated that the vessels were hit by an unidentified assault, resulting in fuel oil spills and fires. Rescue operations are ongoing, with specific casualties and damages still being assessed. The incident occurred against a backdrop of largely stalled shipping traffic through the Strait of Hormuz, further intensifying market concerns over the security of oil transportation in the Gulf.

Analysts note that this attack signals a shift by Iranian proxies or direct actions from threats to targeted sabotage, intended as a response to the IEA's reserve release and ongoing US-Israeli airstrikes.

The IEA agreed to the largest-ever release of 400 million barrels of strategic petroleum reserves. On Wednesday, the IEA announced a coordinated release of 400 million barrels of strategic oil reserves by its 32 member countries, marking the largest emergency stockpile release since the agency's founding. The US will contribute 172 million barrels, with Energy Secretary Chris Wright stating that shipments could begin as early as next week and take approximately 120 days to complete. Other member nations will分担 the remainder, with the total volume representing about one-third of the IEA's total reserves (1.2 billion barrels).

The IEA's move aims to alleviate the panic premium caused by disruptions in the Strait of Hormuz by injecting substantial supply into the market. However, the market reaction has been tepid, with participants believing the release can only fill a small portion of the supply gap and cannot fundamentally resolve the disruption issue.

The reserve release is seen as a temporary measure, with long-term tightness expected due to Hormuz disruptions and Middle East production halts. MST Marquee analyst Saul Kavonic commented that while the 400 million barrel release injects much-needed supply, it can only fill about a quarter of the daily 20-million-barrel shortfall caused by the Strait of Hormuz disruption. Bob McNally, President of Rapidan Energy Group, stated, "The market remains in panic mode, filled with sentiment, fear, and uncertainty." The IEA's action has instead been interpreted as a signal of an extremely severe supply crisis, suggesting the agency does not believe the conflict will end soon.

With shipping through the Strait of Hormuz largely stalled and Middle East oil producers forced to cut output as storage reaches capacity, expectations of prolonged global supply tightness are dominating price dynamics, sustaining risks of high volatility in oil prices.

Former President Trump stated that the US "will closely monitor the situation in the Strait of Hormuz," reiterating that if Iran blocks oil flows, it will face a "20-fold more severe strike." A White House intelligence assessment indicated that Iran's leadership, under new Supreme Leader Mojtaba Khamenei, shows no short-term risk of collapse, with the regime's resilience exceeding expectations.

Trump emphasized that the war would end "quickly," but the Iranian Revolutionary Guard's firm refusal of a ceasefire has undermined market confidence in a narrative of rapid victory.

Supply concerns dominate, with risks of high oil price volatility remaining elevated. Despite short-term price pressure from the IEA's reserve release and Trump's verbal intervention, there has been no substantial easing of the Strait of Hormuz disruption. The tanker attack has intensified market panic.

Analysts warn that if Iranian retaliation escalates or proxy actions expand, oil prices could easily rebound above $110 per barrel. The prevailing expectation of long-term tightness in global energy supply is increasing risks of inflationary pass-through and economic slowdown. Investors should be wary that the reserve release addresses symptoms rather than the root cause, and should monitor the actual progress of national stockpile releases and the latest developments in Strait of Hormuz navigation, as oil market volatility is expected to remain high.