THE International Energy Agency has announced that its 32 member countries will release 400 million barrels of oil from strategic reserves in a coordinated move aimed at stabilising global energy markets following supply disruptions caused by the conflict involving Iran.
The decision, reached unanimously during an emergency meeting on Wednesday, represents the largest coordinated release of oil stocks in history. It is also more than double the 182.7 million barrels released by member countries following the Russian invasion of Ukraine, which triggered a global energy crisis.
According to the agency, the emergency measure is intended to prevent severe supply shortages and calm volatile oil markets shaken by disruptions to shipments through the Strait of Hormuz.
“The oil market challenges we are facing are unprecedented in scale,” said Fatih Birol, executive director, IEA.
“I am very glad that IEA member countries have responded with an emergency collective action of unprecedented size.”
Birol said coordinated intervention was necessary because oil markets are globally interconnected, meaning supply disruptions in one region can quickly affect prices and availability worldwide.
“Energy security is the founding mandate of the IEA, and I am pleased that IEA members are showing strong solidarity in taking decisive action together,” he added.
The release aims to ease pressure on oil prices, which surged after the outbreak of conflict in the Persian Gulf and the disruption of key shipping routes used to transport crude oil.
About one-fifth of global oil supply normally passes through the Strait of Hormuz, making it one of the world’s most critical energy corridors. However, escalating hostilities in the region have sharply reduced cargo traffic through the passage.
Following military strikes by the United States and Israel, Iran has launched attacks on commercial vessels and oil infrastructure across the Gulf, further escalating tensions and disrupting oil shipments.
According to the IEA, exports of crude and refined petroleum products from the region have dropped to less than 10 per cent of pre-war levels.
The decision to release strategic reserves followed emergency consultations among members of the Group of Seven, which includes the United States, the United Kingdom, France, Germany, Italy, Canada and Japan.
During a virtual meeting of G7 leaders, Emmanuel Macron stressed the need to increase global oil production and avoid export restrictions that could further destabilise markets.
“I want to engage with third parties to avoid any type of export restrictions for oil and gas which could destabilise the market and create more volatility,” Macron said.
Ahead of the IEA’s formal announcement, several countries had already indicated they would release portions of their reserves. Germany and Austria signalled they would contribute stocks following the agency’s request, while Japan confirmed it would begin releasing oil from its reserves next week.
IEA member states collectively hold more than 1.2 billion barrels of public emergency oil stocks, alongside about 600 million barrels of industry stocks maintained under government obligations.
Despite the intervention, oil prices remain elevated. Brent crude, the global benchmark, is still about 20 per cent higher than levels recorded before the conflict began, although prices have retreated from earlier peaks.
While the coordinated release is expected to ease short-term supply concerns, analysts say global oil markets will remain sensitive to developments in the Persian Gulf and the reopening of shipping routes through the Strait of Hormuz.