IEA releases record 400 million barrels as Iran war chokes Hormuz oil flow

The IEA action marks a turning point in the global response to a supply crisis triggered when the United States and Israel launched joint attacks on Iran on Feb. 28, but analysts cautioned the 400-million-barrel reserve release covers only a few weeks of lost supply and cannot substitute for an end to the conflict.

The International Energy Agency agreed Wednesday to release 400 million barrels of emergency oil reserves — the largest collective release in the organization’s history — as a widening war in Iran halted tanker traffic through the Strait of Hormuz and sent crude prices surging well above pre-war levels.

The Paris-based IEA, which counts 32 member nations and was created in the aftermath of the 1973 oil crisis, said it would draw on public emergency stocks held by countries including Germany, Austria, Japan and the United States. The announcement marked a shift: G7 leaders and President Donald Trump had resisted tapping national reserves as recently as the weekend before the announcement.

The release is a short-term bridge, analysts said, covering only a few weeks of lost supply and offering no substitute for an end to the conflict.

Prices remain elevated despite reserve pledge

Brent crude, the international benchmark, has swung sharply since the war began Feb. 28 with joint U.S. and Israeli attacks on Iran. On Monday, prices surged to nearly $120 a barrel. They fell to under $90 after Trump suggested the conflict could be near an end, then climbed back to around $100 as attacks continued to escalate.

Prices actually ticked up after Wednesday’s withdrawal was confirmed, with Brent rising 4.8% to settle at $91.98 — still more than 30 percent above the roughly $70 level at which the benchmark was trading before the war started less than two weeks ago.

“The key question on drawing down these reserves remains one of, ‘How long will this conflict last?’” said Tom Seng, an energy finance professor at Texas Christian University. “And, more importantly, ‘How long will the Strait of Hormuz remain blocked?’”

Scale of the disruption

The Strait of Hormuz, a narrow waterway between Iran and the Arabian Peninsula, carries roughly one-fifth of the world’s oil on a typical day. Since the war began, tanker traffic through the strait has all but stopped.

Iraq, Kuwait and the United Arab Emirates have also cut production because they are running out of storage space, according to the Associated Press. Iran, Israel and the United States have all struck oil and gas facilities, worsening supply concerns.

IEA member nations currently hold over 1.2 billion barrels of public emergency oil stocks, with a further 600 million barrels of industry stocks held under government obligation. Each member country is required to maintain a reserve equivalent to at least 90 days of imports.

The previous record for a collective IEA release was 182.7 million barrels, set after Russia’s full-scale invasion of Ukraine in 2022.

U.S. joins the effort

Trump shifted his position Wednesday, telling WKRC Local 12 in Cincinnati that his administration would tap into the Strategic Petroleum Reserve “a little bit” to bring down prices. Over the weekend, the president had maintained that supplies were adequate and prices would fall on their own.

Secretary of Energy Chris Wright confirmed the United States would release 172 million barrels as part of the IEA effort. G7 nations’ pledges account for 70 percent of the total IEA release; France alone committed 14.5 million barrels, according to French President Emmanuel Macron, who praised Wednesday’s decision.

A short-term buffer, experts warn

Choosing when to draw down strategic reserves is a difficult calculation, experts said, particularly when tied to a conflict with no clear endpoint.

“Because of that, countries tend to keep reserves for a last-resort scenario, should the disruption be prolonged,” said Maksim Sonin, an energy executive who works with Stanford University’s Hydrogen Initiative.

Kenneth Medlock, senior director of the Center for Energy Studies at Rice University, said the release could prove inadequate if the conflict drags on.

“The price is up but it could get worse,” Medlock said. “What happens if this drags on for two, three months? Then you run into a situation where you lose your buffer.”

Analysts maintained the 400-million-barrel release makes up for only a few weeks of lost supply — leaving the trajectory of global energy markets dependent on how long the Strait of Hormuz remains closed.