The International Energy Agency (IEA) is preparing to launch the largest strategic oil reserve release in its history to curb surging energy prices triggered by escalating conflict in the Middle East, according to The Wall Street Journal. The announcement sent international oil prices lower, with Brent crude futures reversing an earlier 3.7% gain and falling more than 1%.
Citing officials familiar with the matter, the report said the proposal was introduced during an emergency meeting of energy officials on Tuesday. If approved, the release would surpass the combined 182 million barrels released by IEA members in two tranches following Russia’s invasion of Ukraine in 2022, marking the single largest coordinated drawdown to date. A final decision on the plan is expected Wednesday, though the Journal noted that objections from any member country could delay implementation.
News of the potential release triggered sharp volatility in Brent crude, the global benchmark. Prices had initially spiked 3.7% amid fears of supply disruptions in the Middle East but quickly reversed course after the IEA announcement, settling into a narrow range around $88 per barrel. The initial surge stemmed from widespread chaos in the Persian Gulf, particularly the near-total closure of the Strait of Hormuz—a critical chokepoint handling roughly one-fifth of global seaborne oil shipments—sparking panic buying over physical supply shortages.
Established in the wake of the 1974 oil crisis, the IEA’s core mandate includes coordinating member responses to major supply disruptions. Member countries are required to maintain strategic reserves equivalent to at least 90 days of net oil imports. Collectively, the agency’s 29 members hold approximately 4 billion barrels of reserves. However, past experience shows that large-scale releases often involve complex political negotiations. During the 2022 Russia-Ukraine conflict, the IEA coordinated two reserve releases, but their market impact proved short-lived and failed to reverse the upward trend in oil prices. Should any member raise objections based on domestic energy security concerns, the current plan could face delays. IEA officials at its Paris headquarters did not immediately respond to a Bloomberg request for comment outside regular business hours.
Analysts note that while strategic reserve releases can temporarily dampen price volatility, they cannot fully offset a prolonged closure of the Strait of Hormuz, which could disrupt up to 21 million barrels per day of oil flows—far exceeding what reserves can compensate. The IEA move is thus seen as much a political signal as a practical measure, underscoring major consuming nations’ resolve to prevent uncontrolled price spikes. Ultimately, however, the trajectory of oil prices will hinge on developments in the Middle East. Investors are closely watching Wednesday’s IEA decision and the specific participation levels of key reserve holders like the United States and Japan.
