IEA Proposes Largest-ever Crude Oil Reserve Release, Global Markets Rally; Oracle Pre-Market Surge Over 11%, Oil Prices Trade Below $90

The International Energy Agency (IEA) is proposing the largest-ever release of crude oil strategic reserves, injecting a strong dose of confidence into recent turbulent global financial markets.

According to an article from Wall Street Observer, the IEA has proposed releasing unprecedented volumes of strategic crude oil reserves in response to energy price shocks triggered by Middle East conflicts. The news boosted the MSCI Asia Pacific Index by 1.2%, with tech stocks rising 3.2%, and Oracle’s post-market share price surged 8%. At the same time, the dollar declined for the fourth straight day, U.S. Treasury prices rose, the 10-year yield dipped slightly by one basis point to 4.14%, while gold extended its gains, trading near $5,200 per ounce.

However, market gains subsequently narrowed. According to the UK's Financial Times, JPMorgan has informed private credit lenders that it has written down some loans and tightened lending standards, intensifying concerns about credit quality. European equities opened lower: the Euro Stoxx 50 dropped 0.9% at the open, Germany’s DAX fell 1%, the UK’s FTSE 100 declined 0.6%, and France’s CAC 40 slipped 0.8%. U.S. stock index futures saw their advance shrink to just 0.2%. Oracle shares surged over 11% pre-market, driven by stronger-than-expected revenue guidance.

Trump warned Iran not to lay mines in the Strait of Hormuz, following a prior erroneous tweet from U.S. Energy Secretary Chris Wright claiming U.S. Navy escorts were moving oil tankers through the strait—later deleted—and White House confirmation that no such operation ever took place. This incident further heightened market volatility. Investors are now awaiting the U.S. inflation data due later this evening for directional clues.

• S&P 500 futures rose 0.3%. Nasdaq 100 futures gained 0.2%. Oracle shares surged over 11% pre-market, fueled by better-than-expected revenue outlook.
• Europe’s Stoxx 50 opened down 0.9%, Germany’s DAX dropped 1%, the UK’s FTSE 100 fell 0.6%, and France’s CAC 40 declined 0.8%.
• Nikkei 225 closed up 1.4%, at 55,025.37. Japan’s TOPIX closed 0.9% higher, at 3,698.85. South Korea’s KOSPI ended 1.4% higher, at 5,609.95.
• UK government bonds opened lower across the board, with the 10-year yield climbing 6 basis points to 4.61%.
• U.S. Treasury prices rose, pushing the 10-year yield down one basis point to 4.14%.
• The spot dollar index declined 0.2%.
• The euro recovered 0.3% of its earlier gains against the dollar, settling near 1.1614.
• Gold traded near $5,200 per ounce.
• West Texas Intermediate (WTI) crude rose 0.4% to $83.77 per barrel.
• Bitcoin fell 0.7%, closing at $69,749.85.

Reserve Release Boosts Market Sentiment

The IEA’s proposal to draw down strategic reserves emerged as the key driver behind the market rebound. Khoon Goh, Head of Asian Research at ANZ Bank, said, “Markets remain cautious on the Middle East situation, so any news regarding strategic reserve releases—whether from the IEA, the U.S., or the G7—can provide short-term relief for oil prices.”

Brent crude posted another small decline of 0.2% on Wednesday, after recording its largest single-day drop in four years on Tuesday. Joshua Crabb, Head of APAC Equities at Robeco Hong Kong, noted, “The initial price shock appears to have been absorbed by the market. The baseline scenario for oil prices is trending downward, as there is significant political will driving this outcome.”

However, historical precedents suggest that reserve releases don’t always deliver expected results. In 2022, two previous reserve releases initially pushed oil prices higher—as the market interpreted them as signaling deeper crises—before eventually helping to ease prices.

Geopolitical Risks Persist, Market Volatility Remains

With the Middle East conflict entering its second week and no signs of easing, tensions remain high. Trump warned Iran against laying mines in the Strait of Hormuz, amid reports suggesting Iran may be preparing—or already has begun—such actions. The Strait typically handles about one-fifth of global oil flows, and actual blockage risks continue to push up Brent crude prices year-to-date, forcing oil producers to cut output.

The market turmoil on Tuesday was partly triggered by a mistaken message: U.S. Energy Secretary Chris Wright accidentally tweeted about U.S. Navy escorts guiding oil tankers through the Strait, which he later deleted. The White House quickly confirmed no such operation had occurred, further rattling already fragile market sentiment.

Garfield Reynolds, strategist at Bloomberg and head of the MLIV team, stated, “Unless shipping volumes through the Strait rapidly return to pre-war levels, energy prices will remain elevated, as the war and actual blockade are disrupting supply chains and leading to expanding production cuts.”

Fawad Razaqzada of Forex.com said, “While traders may welcome a sudden drop in oil prices, the geopolitical backdrop remains far from stable, leaving markets vulnerable to further swings. Ultimately, the biggest determinant lies in whether energy supply in the region can return to normal.”

U.S. Inflation Data Next Key Turning Point

As Middle East tensions continue to disrupt markets, investors are now turning their focus toward the U.S. Consumer Price Index (CPI) data due later this evening. The latest employment report has already shaken market assumptions about labor market stability.

Market expectations point to a core CPI rise of 0.2% month-over-month, excluding volatile food and energy components—a sign that price pressures may be moderating before the outbreak of the Iran war introduced renewed uncertainty into inflation outlooks.

Sean Darby of Mizuho Securities said the market “may have been overly optimistic about overall inflation trends,” but with the Middle East conflict ongoing, investors will “feel the inflation impact faster and more sharply.”

Jun Bei Liu, co-founder and chief portfolio manager at Sydney-based hedge fund Ten Cap Investment Management, emphasized that although the reserve release provided temporary relief, maintaining hedging positions remains prudent. “Keeping hedging exposure is crucial—including allocations to certain energy stocks—because the outlook remains extremely uncertain.”