NEW YORK - The International Energy Agency's announcement of a record release of oil from strategic reserves failed to ease supply concerns, with crude prices pushing higher and global equities mostly dropping.
The move to release oil stocks came as Iran said it was ready for a long war of attrition that would "destroy" the world economy, after firing on two commercial ships and threatening any vessels from the United States or its allies.
The IEA announced its member countries would unlock 400 million barrels of oil from their reserves to ease the impact from a lack of supplies transiting through the Strait of Hormuz.
Tehran has retaliated against US and Israeli attacks that began on February 28 by attacking targets across the oil-rich Gulf and effectively shutting down the crucial Strait of Hormuz, through which nearly 20 percent of the world's oil usually transits to world markets.
Despite the IEA announcement, oil prices jumped more than four percent.
While it may be a record reserves release, it still replaces only part of the lost supplies, noted analyst Helge Andre Martinsen at DNB Carnegie.
He estimated that releases from strategic reserves could total 1.75 million barrels per day, while lost supply is approximately 11 million barrels per day of crude and around four million barrels per day of oil products.
"Hence, it will help, but it won't make a massive difference for the very short-term global oil balance," he said.
Robert Yawger from Mizuho USA pointed to lingering questions about the timing of the release, adding that Tuesday's quickly deleted Trump administration post erroneously reporting a successful Strait of Hormuz tanker escort had raised questions.
"The 400 million barrel number (is obviously) very large and it implies that the problem is very large," Yawger said.
Equity markets were not reassured either. Wall Street indices finished mostly lower while European markets closed in the red.
"With the IEA's record oil reserves release unable to push prices lower today, this is keeping risk appetite downbeat, with stock markets struggling and currencies of oil-importing regions lower," said Forex.com analyst Fawad Razaqzada.