Members of the International Energy Agency (IEA) agreed on Wednesday to release 400 million barrels of emergency oil stocks, the largest coordinated draw in the agency’s history, as the conflict in the Middle East disrupts global crude flows and pushes prices higher.
Largest Emergency Release on Record
IEA executive director Fatih Birol said the barrels will be made available to offset supply losses linked to the effective closure of the Strait of Hormuz, a key shipping corridor for global oil and refined products. Birol said the release is intended to ease immediate market pressure but emphasized that restoring transit through Hormuz remains the critical condition for durable stability in oil and natural gas flows.
The 400 million-barrel action exceeds the 2022 coordinated releases following Russia’s invasion of Ukraine, when IEA countries released 182 million barrels in two tranches and the United States later sold an additional 180 million barrels from its Strategic Petroleum Reserve over six months.
Supply Shock May Outrun the Draw
Despite the size of the release, the IEA’s move may not fully counter the scale of the current disruption. Birol said the near-shutdown of Hormuz is choking off roughly 15 million barrels per day of crude and about 5 million barrels per day of other oil products.
At that pace, the announced volume would cover about 26 days of lost crude supply alone, raising doubts about whether emergency stocks can meaningfully cap prices if disruption persists. Analysts cited in the report characterized the reserve release as temporary relief rather than a full solution, arguing that only de-escalation and the reopening of shipping routes can drive sustained price declines.
Oil Prices Hold Firm After the Announcement
Markets showed limited immediate relief following the IEA statement. Brent rose about 4% to around $91 a barrel, while WTI climbed by a similar amount to roughly $87. Oil has remained sharply higher than pre-war levels, with Brent trading about 23% above the roughly $73 level seen before the conflict and WTI up around 28%, according to the report.
Recent trading has been volatile. Brent and WTI surged above $100 earlier in the week, then dropped sharply the next day. The report attributed that pullback in part to comments from U.S. President Donald Trump suggesting the war could end soon and to Saudi Aramco outlining steps to reroute crude via a Red Sea pipeline corridor, restoring a large share of shipments.
Fuel Prices and the Consumer Impact
The report noted uncertainty about how much a large reserve draw can translate into lower prices at the pump. It cited an estimate that the combined 2022 releases reduced U.S. gasoline prices by about 17 to 42 cents per gallon. Since the current conflict began on Feb. 28, the average U.S. gasoline price has risen roughly 60 cents to $3.58, based on AAA figures referenced in the report.
Hormuz Risks Escalate
The outlook for reopening Hormuz appeared more uncertain in the report, which cited U.S. intelligence assessments suggesting Iran has begun laying mines in the waterway. While the mining was described as not yet extensive, the report said Iran is believed to possess thousands of naval mines, a capability that could further deter tanker traffic and intensify supply constraints.
Separate incidents near the strait also added to risk premiums. The report cited the UK maritime agency as saying three vessels were hit by unknown projectiles near Hormuz. It also noted fresh military operations and additional strikes reported by Iran and Israel on Wednesday.
