The International Energy Agency has agreed to the largest ever release of oil from the world’s combined strategic petroleum reserves to address severe supply disruptions caused by the U.S. and Israel’s war in Iran.
Combined, IEA member countries will be releasing about 400 million barrels over the coming weeks, according to IEA President Fatih Birol. The decision to release the oil was unanimous, a statement from the organization said.
The United States is a member of the IEA, but it is not clear how it will participate in this action. The specific amounts each member country would release were not immediately available, and the Department of Energy and the White House did not immediately respond to requests for comment.
The details will be critical, analysts warned: Oil must be released quickly in order to calm the markets.
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Global oil prices have been extraordinarily volatile ever since Israel and the U.S. began bombing Iran, triggering regional violence. The markets have seen historically large spikes and falls in a single day of trading as messages about the war shift on a daily basis. Without the ability to physically move oil out of the Gulf region through the Strait of Hormuz, the world’s largest oil producers have started to cease oil production.
This release of oil from the IEA, roughly twice as much as the body agreed to release in response to Russia’s war with Ukraine, is large enough to theoretically make up for all of the oil that passes through the Strait of Hormuz for about 20 days.
“This is a major decision which will help the world economy weather a closure of the strait for 45-50 days,” said Homayoun Falakshahi, a crude analyst for commodity insights firm Kpler.
If the war in Iran goes beyond mid-April, this release cannot prevent an economic crisis, he warned.
The IEA called for a return to stability in the Strait of Hormuz.
“To be clear, the most important thing for a return to stable flows of oil and gas is the resumption of transit through the Strait of Hormuz,” Birol said at a press conference announcing the global oil release.
The Trump administration has sent mixed messages to the markets about its plans for the war, sometimes on the same day both declaring that the war is nearly finished and announcing plans for continued aggressive action.
On Tuesday, markets moved wildly in response to a post on X from Energy Secretary Chris Wright that announced a Navy vessel had escorted an oil tanker through the Strait of Hormuz.
A few minutes later, oil prices went back up when the post was deleted and the Trump administration admitted the news was incorrect.
The Trump administration and global leaders have largely resisted releasing oil from reserves. SPR releases are seen as a tool of last resort and could signal to the markets just how serious the situation has become, said Rosemary Kelanic, a Middle East expert at Defense Priorities.
The world’s reserves are also somewhat limited, and refilling reserves after releases is a costly process that countries hesitate to commit to unless there is a true emergency.
The U.S.’ SPR, while still the largest in the world, is already depleted from releases at the beginning of the war in Ukraine.
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