The International Energy Agency will release 400 million barrels of oil from emergency reserves to stabilise markets amid disruptions caused by the Middle East war
The International Energy Agency (IEA) announced on Wednesday that its member countries will release 400 million barrels of oil from emergency reserves to cushion the impact of disruptions caused by the ongoing Middle East conflict.
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IEA Executive Director Fatih Birol said the coordinated move represents the largest emergency oil release in the organisation’s history.
“IEA countries have unanimously decided to launch the largest-ever release of emergency oil stocks in our agency’s history. IEA countries will be making 400 million barrels of oil available,” Birol told reporters.
He described the move as a major step aimed at stabilising global markets following supply disruptions linked to the conflict involving the United States, Israel and Iran.
However, Birol stressed that restoring normal transit through the Strait of Hormuz remains the most critical factor for stabilising global oil and gas flows.
The strategic waterway normally carries about 20 per cent of the world’s oil and gas supplies.
The coordinated release surpasses the previous record of 182 million barrels deployed in 2022 after Vladimir Putin launched the invasion of Ukraine.
The 32-member energy body said the oil would be released over a timeframe suitable to each member country’s circumstances and may be supplemented by additional emergency measures.
G7 leaders discuss economic impact
The announcement came as leaders of the Group of Seven (G7) advanced economies held a virtual meeting chaired by Emmanuel Macron to discuss the economic consequences of the conflict.
Macron urged leaders, including Donald Trump, to coordinate efforts to reopen the Strait of Hormuz as soon as possible while maintaining sanctions against Russia over the Ukraine war.
The French president also said G7 countries would coordinate with Gulf states in the coming days and noted that France and its allies are preparing a defensive mission aimed at restoring navigation through the critical shipping route.
Countries begin tapping oil reserves
Several countries have already begun activating their emergency reserves.
Japan announced plans to release oil from its strategic stockpile as early as next week, according to Prime Minister Sanae Takaichi.
Meanwhile, Germany confirmed it would release about 2.4 million tonnes of crude from its reserves, according to Economy and Energy Minister Katherina Reiche.
Doug Burgum, the U.S. Interior Secretary, described the situation as a temporary transit issue rather than a global shortage of energy supplies.
Analysts warn release may only offer temporary relief
Energy analysts caution that the massive release may only provide short-term relief.
Ipek Ozkardeskaya, a senior analyst at Swissquote Bank, said the 400 million barrels represent a small portion of daily consumption among IEA member states, which collectively use around 45 million barrels per day.
She added that oil production in the Middle East has already declined by about six per cent since the conflict began, intensifying market pressure.
The crisis has prompted governments worldwide to implement emergency measures. Countries such as Bangladesh, India, France and Greece have taken steps ranging from tightening fuel regulations to capping petrol profit margins to limit the impact of rising oil prices.
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IEA member states currently hold more than 1.2 billion barrels in public emergency oil reserves, alongside an additional 600 million barrels maintained by industry under government mandates.
