However analysts have questioned whether the releases will be enough to tame oil markets in the long run, which had already seen strained capacity before the outbreak of war in Ukraine.
ANZ Research warned the move could also backfire if it encouraged members of the Organisation of Petroleum Exporting Countries (OPEC) to hold off accelerating production.
Tammy Da Costa, an analyst at DailyFX, said: “The decision made by the US and members of the EIA to release massive amounts of oil from its reserves will likely provide a temporary buffer for oil prices but the long-term trajectory remains uncertain.
“Because of Europe’s extreme reliance on Russian oil and gas, the ban and sanctions against Russia are extremely concerning, and an extension of the war and additional intervention from global leaders will likely place pressure on OPEC to ramp up supply but if producers cannot compensate for the consequential short-falls from Russia, I believe that we will have a larger issue at hand which may only get priced-in at a later stage.”
Published at Fri, 08 Apr 2022 13:27:42 +0000