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IEA proposal and size
The International Energy Agency (IEA) circulated a proposal for the largest coordinated release of strategic oil reserves in its history to blunt a sharp price surge tied to the U.S.–Israel war with Iran, with reported target volumes ranging from 300–400 million barrels and multiple outlets saying the plan would exceed the 182.7 million barrels released during the 2022 Ukraine crisis.
“The International Energy Agency has proposed the largest release of oil reserves in its history to bring down crude prices that have soared due to the U.S.-Israel war with Iran.”
Some reports cite a specific 400 million-barrel figure and say all 32 IEA members were involved in the decision-making process.
The move was framed as an effort to stabilise global crude markets as geopolitical risks around the Strait of Hormuz intensified.
Why the release
The release was prompted by severe disruptions to Gulf output and shipping after attacks and blockades around the Strait of Hormuz, which carries roughly one-fifth of the world’s oil.
Analysts and industry notices describe refinery closures, attacks on tankers, and mines or suspected mine-laying that have sharply reduced flows.
Consultancy estimates and reporting indicate large volumes of Gulf supply have been sidelined, with some analysts warning the disruption could exhaust spare capacity and push benchmarks considerably higher if the maritime risks persist.
Market response
Markets reacted sharply but unevenly: futures and spot benchmarks swung as traders priced in both the announcement and the underlying supply risks.
“Brent crude rising to $119 per barrel on Monday before dropping to around $90 on Tuesday and easing further to $85 on Wednesday.”
Reports show crude jumped to multi‑week highs during the early days of the conflict and then fell after the release proposal was reported.
Intraday futures moves and algorithmic trading produced rapid price adjustments—evidence that announcement effects can move markets before any physical barrels reach consumers.
Limitations and timing
Officials and analysts stressed logistical and political limits: IEA members collectively hold roughly 1.2 billion barrels in public stocks plus about 600 million barrels in mandatory commercial inventories.
Releases take time to mobilise, national procedures and shipping add delays, and the coordinated drawdown would cover only a limited number of days of lost Gulf supply.
The IEA’s consensus process also means a single member objection can delay or change the timing and scale of any coordinated action.
Political dynamics
Key contributors and politics shaped the package: reporting credits the United States and Japan with large contributions, and individual governments signalled plans to act quickly.
“The United States will take a lead role by contributing 172 million barrels, according to U.S. Energy Secretary Chris Wright.”
Senior leaders framed the measure as both market-stabilising and politically salient ahead of domestic pressures.
Some analysts cautioned the drawdown would be only a partial fix unless the maritime threats were removed, and governments will also face choices about how and when to rebuild depleted national stocks.