U.S. stock indexes fell from record levels as concerns about disruptions to oil supplies through the Strait of Hormuz added to market volatility. Oil prices first rose and then slipped after the International Energy Agency said it was ready to draw on additional reserves.
Wall Street’s main indexes closed lower on Wednesday, a day after the Nasdaq and S&P 500 set records. Investors also watched U.S. Treasury yields, which reached a 24-year high amid concerns that expensive oil could fuel inflation and keep interest rates elevated.
Oil prices initially climbed after warnings of fresh attacks on tankers in the Strait of Hormuz. They later turned lower after International Energy Agency member countries said they were prepared to release more strategic reserves if needed. The agency’s head said diesel would be prioritised because supplies of the fuel were tight.
G7 countries, coordinating with the IEA, had already agreed on Friday to release 100 million barrels of crude oil and diesel to ease concerns about global energy supplies caused by the U.S.-Iran war.
The UK Maritime Trade Operations agency said there had been nine attacks on tankers in the Strait of Hormuz this month. U.S. Secretary of State Marco Rubio said Washington controlled the strait and that oil flows were close to normal. Data from maritime intelligence firm Kpler showed Gulf oil flows excluding Iran recovered to more than 81% of pre-war levels in September, even as freight, insurance and security costs rose.
Twelve crew members were injured on Tuesday when an unknown projectile struck a Panama-flagged tanker in the strait, India’s Ministry of External Affairs said. Tensions around shipping continue to weigh on oil prices and investor sentiment.