European stock markets opened lower on Wednesday evening, with major indices declining across the board. As of the latest update, the UK's FTSE 100 index fell over 1%, France's CAC 40 dropped more than 2%, and Germany's DAX index declined over 1.7%. The downturn follows reports that Saudi Arabia has begun cutting oil production due to saturated storage facilities.
Although crude oil prices have retreated from recent highs, they remain elevated. At the time of writing, WTI crude rose over 13%, while Brent crude surged more than 14%.
According to recent updates, Saudi Arabia has initiated oil output reductions as its storage infrastructure reaches capacity. Data from the UK Maritime Trade Operations office indicates that since military strikes by Israel and the United States against Iran on February 28, approximately 10 vessels have been attacked in or near the Strait of Hormuz. Additional data from the International Maritime Organization shows nine separate vessel attacks occurred in the strait over one week, resulting in seven fatalities.
On March 9, Iranian Parliament Speaker Mohammad Bagher Ghalibaf warned that if the current conflict escalates to include infrastructure targets, the economic repercussions could persist regionally and globally for an extended period. He suggested that under such circumstances, international oil prices could remain above $100 per barrel for a considerable time.
In response to soaring oil prices, the Financial Times reported on March 9 that the Group of Seven nations plans to hold an emergency meeting to discuss the possibility of a coordinated release of strategic petroleum reserves. The move, potentially coordinated through the International Energy Agency, aims to address price surges triggered by escalating tensions in the Middle East.
Separately, Japan's Ministry of Economy, Trade and Industry announced on March 9 that it has instructed domestic petroleum reserve bases to prepare for a potential release of reserves. Japanese news agency Kyodo reported that the ministry has directed ten reserve bases managed by the Organization for Energy and Metals Resources to complete preparatory measures. The Nikkei website also quoted ministry officials stating that preparatory work is progressing steadily.
While Japanese Chief Cabinet Secretary Minoru Kihara confirmed during a press conference on March 9 that no final decision has been made regarding reserve releases, Prime Minister Takaichi Sanae previously noted that Japan's combined government and private sector oil reserves are sufficient for 254 days of consumption.
Local media and analysts suggest that with disruptions to shipping through the critical Middle Eastern oil transit route of the Strait of Hormuz, Japan must prepare for prolonged economic impact should hostilities between the U.S., Israel, and Iran continue.