Oil Prices Surge: Iran Threat & Global Reserves Release
Doha and global markets are bracing for escalating tensions in the Middle East, as Qatar warns of “catastrophic” consequences should the current conflict broaden into a regional war. The warning, issued by a spokesperson for the Qatari Ministry of Foreign Affairs on , comes amid a surge in Iranian attacks and heightened alerts in Doha.
Qatar has consistently voiced concerns about the potential for wider conflict since , repeatedly cautioning against escalation. “This is the biggest ‘I told you so’ in the history of ‘I told you so’s,” stated Majed Al-Ansari, the ministry spokesperson and advisor to the Prime Minister, according to reports. He emphasized that Qatar had warned from the outset that unchecked escalation would lead to a regional war, a scenario he believes is now unfolding.
The immediate trigger for the renewed warnings appears to be a recent wave of Iranian attacks, prompting air raid alerts in Doha. However, the underlying concern extends beyond immediate hostilities to the potential disruption of global energy markets. Iran has reportedly threatened to raise the price of oil to $200 per barrel, a move that would have “devastating effects” on the global economy.
In response to this threat, and as a preemptive measure, 32 of the world’s wealthiest nations – members of the Organisation for Economic Co-operation and Development (OECD) – have agreed to release 400 million barrels of oil from their strategic reserves in an attempt to stabilize prices. Portugal is participating in this coordinated effort, with the possibility of releasing up to 10% of its own oil reserves, though no firm date has been set, according to Environment and Energy Minister Maria da Graça Carvalho.
The international community is attempting to mitigate the economic fallout, but the situation remains volatile. Brent crude oil prices rose by 5% on , exceeding $92 per barrel, while European gas prices climbed nearly 4% to over €49 per MWh. The International Energy Agency (IEA) has coordinated a record injection of oil reserves into the market, aiming to counter the price surge.
The threat to global oil supplies is centered on the Strait of Hormuz, a critical waterway through which approximately 20% of the world’s oil supply passes. Iran’s Revolutionary Guard has repeatedly warned it is prepared to block tankers transiting the strait unless attacks cease, stating they will not allow “a single liter” of Middle Eastern oil to reach the United States and its allies. The U.S. Navy has reported destroying 16 Iranian mines in the strait.
The conflict has already taken a heavy toll. According to Iranian Ambassador to the United Nations, Amir Saied Iravani, more than 1,300 civilians have been killed in Iran by U.S. And Israeli bombardments, with nearly 8,000 homes destroyed, alongside significant damage to medical, educational, and energy infrastructure, and 1,600 commercial establishments. In Israel, 11 people have been killed, including seven U.S. Soldiers, and 140 have been injured.
Despite the escalating violence, former U.S. President Donald Trump has suggested the war is nearing its end, stating on , that “it’s practically over.” He also indicated the U.S. Navy is prepared to escort tankers through the Strait of Hormuz if necessary. However, the White House maintains a more resolute stance, with Defense Minister Pete Hegseth asserting that the war will not end until “the enemy is totally and decisively defeated,” and that the conclusion will be determined by Trump.
Saudi Aramco, the world’s largest oil exporter, has also warned of “catastrophic consequences” should the Strait of Hormuz be closed, predicting “drastic consequences for the global economy” the longer any disruption lasts. Qatar’s earlier warnings of $150 per barrel oil now seem conservative in light of Iran’s threat.
Portugal’s contribution to the international effort to stabilize oil prices will be limited to a maximum of 10% of its reserves, released in coordination with other European nations. Minister Carvalho emphasized that Portugal currently holds reserves sufficient for 93 days of consumption, and four weeks of gas supply. She noted that the IEA is particularly concerned about the impact on diesel fuel, given the concentration of refineries in the Middle East.
Looking ahead, the next week is considered crucial, with European energy ministers scheduled to meet in Brussels on , followed by meetings of European political groups and the European Council later in the week. Discussions will focus on addressing gas prices and protecting electricity prices. The hope, according to Minister Carvalho, is that the conflict will be resolved within three to four weeks, primarily to mitigate price increases rather than address potential supply shortages.