The International Energy Agency (IEA), a global energy watchdog, with several of the wealthiest countries as member nations, has announced the largest release of government oil reserves in its history, two weeks after the United States and Israel started their war on Iran with strikes on Tehran.<\/p>\n
In retaliatory attacks, Tehran has launched strikes on Israel as well as US military assets and energy facilities in Gulf countries, and has closed the Strait of Hormuz, a vital artery in the global oil supply chain, driving up crude prices to more than $100 per barrel.<\/p>\n
\u201cThe war in the Middle East is creating the largest supply disruption in the history of the global oil market,\u201d the IEA said in its monthly market report.<\/p>\n
While the IEA\u2019s 32 member nations appeared hesitant earlier in the week to tap into the strategic reserves, they ultimately announced they would release nearly 400 million barrels of emergency crude. That\u2019s one-third of the grouping\u2019s total holding of 1.2 billion barrels of government reserves.<\/p>\n
Previously, IEA member nations have released oil from emergency reserves five times: During the 1990-1991 Gulf War; after Hurricane Katrina in 2005; during the Libyan civil war in 2011; and twice after the Russian invasion of Ukraine.<\/p>\n
But is this latest release sufficient to calm down the disrupted market?<\/p>\n The energy watchdog argued that the supply shock triggered by Iran\u2019s strikes on cargo vessels and its blockade of the Strait of Hormuz meant energy markets are facing a worse crisis than during the Gulf War of 1991 and Russia\u2019s 2022 invasion of Ukraine.<\/p>\n Before the US and Israel attacked Tehran \u2013 and assassinated Iran\u2019s Supreme Leader Ayatollah Ali Khamenei \u2013 on February 28, Brent crude was trading at about $65 per barrel. Now, it is above $100, and Iranian leaders have warned countries that it will not allow \u201cone litre of oil\u201d to pass the Hormuz Strait if attacks continue, and that the price could go above $200 per barrel.<\/p>\n Earlier this week, former IMF economist Olivier Blanchard was quoted by news outlet Business Insider that this could be possible if tankers carrying oil cannot be protected from Iranian attacks. \u201cI find it hard not to have as a central scenario where oil prices will remain very high for a long time, higher than the market current prices,\u201d Blanchard said on Thursday.<\/p>\n The IEA\u2019s announcement of a plan to release 400 million barrels of oil is much higher than the 2022 release of 182 million barrels of oil by the group\u2019s members after Russia invaded Ukraine.<\/p>\n \u201cEnergy security is the founding mandate of the IEA, and I am pleased that IEA members are showing strong solidarity in taking decisive action together,\u201d said Fatih Birol, executive director of the Paris-based IEA.<\/p>\n Birol applauded the member nations\u2019 decision to contribute to the release from their strategic reserves. \u201cThis is a major action aiming to alleviate the immediate impacts of the disruption in markets,\u201d Birol said. \u201cBut, to be clear, the most important thing for a return to stable flows of oil and gas is the resumption of transit through the Strait of Hormuz.\u201d<\/p>\n About one-fifth of the world\u2019s oil is transported through the Strait of Hormuz. That\u2019s more than 20 million barrels daily on average. And coordinated IEA releases are usually spread over weeks or months, meaning only a portion of the 400 million planned barrels will be released in the short term.<\/p>\n The IEA has not yet provided a precise timeline for releasing the oil.<\/p>\n Neil Quilliam, an associate fellow with the Middle East and North Africa Programme at Chatham House, London, said, ultimately, the IEA release \u201cwill not make a large material difference\u201d in the ongoing crisis.<\/p>\n \u201cIt really depends on the pace of the release. It is not clear yet what the schedule is,\u201d Quilliam told Al Jazeera. By some calculations, such relief could evaporate as soon as three weeks.<\/p>\n \u201cIt\u2019s a one-shot solution. It\u2019s a high-risk strategy,\u201d he said. \u201cSo, once that all is finished, there is no real alternative.\u201d<\/p>\n After new Supreme Leader Mojtaba Khamenei, son of the slain ayatollah, struck an even more defiant tone in his first address on Thursday, oil prices shot up yet again.<\/p>\n The US created its own strategic petroleum reserve in 1975 after the Arab oil embargo exposed Washington\u2019s energy security vulnerabilities.<\/p>\n It has the world\u2019s largest reserve of countries which publicly report such reserves, with a maximum capacity of about 720 million barrels.<\/p>\n At present, Washington only holds about 415 million barrels of crude, stored in underground salt caverns along the Gulf Coast in Texas and Louisiana, as stocks have been depleted by Russia\u2019s war on Ukraine.<\/p>\n Only China is estimated to have a larger stockpile currently, but Beijing\u2019s holdings are not made public.<\/p>\n The US is currently the world\u2019s largest oil producer and consumer, and has confirmed that it will release 172 million barrels of oil from its strategic petroleum reserve as its contribution to coordinated efforts with the IEA.<\/p>\n US President Donald Trump told a local news channel on Thursday that the US government would tap the strategic reserve, in its boldest bid yet to stabilise prices in the energy sector, and \u201cthen we\u2019ll fill it up\u201d.<\/p>\n Trump has previously criticised former President Joe Biden\u2019s administration for tapping the reserve to bring down petrol prices.<\/p>\n Secretary of Energy Chris Wright said the release would begin next week and take roughly 120 days for delivery. He added that the government would then work to replace about 200 million barrels in the next year.<\/p>\n No.<\/p>\n \u201cOil molecules move fast, and so do markets. What matters is how fast the released volumes actually move,\u201d Maksim Sonin, an energy executive who works with Stanford University\u2019s Center for Fuels of the Future, told Al Jazeera.<\/p>\n \u201cUnless the underlying problem is solved, no release can fix the market,\u201d he added.<\/p>\n Helima Croft, head of global commodity strategy at RBC Capital Markets, added: \u201cWhile the IEA has decided to release 400 million barrels from the group\u2019s strategic oil reserves, with commitments from Japan, South Korea, France, Germany, the UK, and the US announced thus far, the market impact of the move may prove limited.<\/p>\n \u201cSupplies will be constrained by the pace at which oil can be extracted from reserves.\u201d<\/p>\n Trump and his officials have changed their position on the endgame from the hostilities against Iran, frequently by the time the sun sets in the other part of the world. The US president, however, insists that the conflict is a blip and not another drawn-out war.<\/p>\n \u201cBut the fact that they\u2019ve rolled in with the IEA, and they\u2019re releasing 172 million barrels, is significant,\u201d Quilliam told Al Jazeera. \u201cIf we get beyond that timeframe [of ending the fighting and days that the strategic oil reserves can cover], what is the situation gonna be like?\u201d<\/p>\n Not very. On paper, the US claims it can release 4.4 million barrels a day; however, its actual output is much smaller, and deliveries could take weeks to reach after a drawdown is signed.<\/p>\n The US would release its pledged 172 million barrels over the next 120 days \u201cto deliver based on planned discharge rates\u201d, Chris Wright, the energy secretary, said.<\/p>\n The US Department of Energy says it will be prepared to begin deliveries of oil into the market 13 days after the release and sale. It could take much longer if the oil needs to be shipped to Asia, where the shortage is most severe as a result of the fallout of the Iran war. That means that supplies may not reach Asian refiners until mid-May.<\/p>\n \u201cThe US is still in good shape, even given the current release volume,\u201d added Sonin of Stanford University. \u201cSuch significant quantities cannot reach refineries in a day or two. It\u2019s faster domestically, where pipeline connectivity is strong, and much slower when barrels are shipped.\u201d<\/p>\n Regardless of the quantities of oil released from the reserves, \u201cthe government\u2019s willingness to intervene is itself a strong positive signal to the markets\u201d, Sonin told Al Jazeera.<\/p>\n The makeup of the entire 400 million barrels being released to the market is not known, but we do know what sort of oil the US has in its own reserves.<\/p>\n Currently, the US reserve has 155 million barrels of sweet crude, which has low sulphur, and 261 million barrels of sour crude, which has high sulphur.<\/p>\n Sweet crude is easier and cheaper to refine, while sour crude requires more complex refining and processing.<\/p>\n While US refineries have seen billions of investment which has equipped them to handle sour crude, many oil importers \u2013 such as India, where the energy crisis has caused the government to enact emergency measures to discourage hoarding \u2013 do not have the same refining capabilities, further complicating efforts to mitigate the crisis.<\/p>\n Oil comes in various types:<\/strong><\/p>\n Analysts have described the IEA\u2019s release of oil reserves as a \u201cBand-Aid\u201d.<\/p>\n By charter, the IEA mandates its members, which include the G7 countries, to store emergency oil stocks of at least 90 days\u2019 worth of imports.<\/p>\n Based on past precedents, data firms estimate IEA member countries would be able to boost their output by 1.2 million barrels per day at most on top of this. But this is only a fraction of the daily volume \u2013 about 20 million barrels \u2013 that sails through the Strait of Hormuz. Therefore, the release is unlikely to have a significant effect on world shortages, analysts say.<\/p>\n Besides releasing oil from the US strategic petroleum reserve, the Trump administration has taken a few additional measures to ease supply pressures and attempt to curb rising oil prices.<\/p>\n The US Treasury issued a 30-day waiver allowing countries to purchase sanctioned Russian oil that was already loaded and at sea, amounting to roughly 100 million barrels, in an effort to quickly add supply to global markets.<\/p>\n The administration is also considering temporarily waiving the Jones Act, a US maritime law requiring goods shipped between domestic ports to be carried on US-built and US-crewed vessels, aiming to ease domestic supply bottlenecks.<\/p>\n However, a White House spokesperson said this has not been finalised yet.<\/p>\n<\/div>\n The International Energy Agency (IEA), a global energy watchdog, with several of the wealthiest countries as member nations, has announced the largest release of government oil reserves in its history, two weeks after the United States and Israel started their war on Iran with strikes on Tehran. In retaliatory attacks, Tehran has launched strikes on […]<\/p>\n","protected":false},"author":1,"featured_media":14945,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[],"class_list":["post-14944","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-explained"],"_links":{"self":[{"href":"https:\/\/inernews.online\/index.php?rest_route=\/wp\/v2\/posts\/14944","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/inernews.online\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/inernews.online\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/inernews.online\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/inernews.online\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=14944"}],"version-history":[{"count":0,"href":"https:\/\/inernews.online\/index.php?rest_route=\/wp\/v2\/posts\/14944\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/inernews.online\/index.php?rest_route=\/wp\/v2\/media\/14945"}],"wp:attachment":[{"href":"https:\/\/inernews.online\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=14944"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/inernews.online\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=14944"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/inernews.online\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=14944"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"tehran\"](\"https:\/\/www.aljazeera.com\/wp-content\/uploads\/2026\/03\/2026-03-13T094524Z_1397006244_RC2K3KAEJ5PK_RTRMADP_3_ISRAEL-PALESTINIANS-ALQUDSDAY-IRAN-1773400157.jpg?w=770&resize=770%2C513&quality=80\")
What has the IEA announced?<\/h2>\n
![\"trump\"](\"https:\/\/www.aljazeera.com\/wp-content\/uploads\/2026\/03\/2026-03-12T141543Z_1197436378_RC2Z2KAXCYTB_RTRMADP_3_IRAN-CRISIS-ISRAEL-1773400150.jpg?w=770&resize=770%2C514&quality=80\")
What has the US announced?<\/h2>\n
Will this plug the oil shortage straight away?<\/h2>\n
![\"india\"](\"https:\/\/www.aljazeera.com\/wp-content\/uploads\/2026\/03\/AFP__20260312__A2YF6J8__v1__MidRes__IndiaWarIranUsIsraelEconomyOil-1773400163.jpg?w=770&resize=770%2C513&quality=80\")
How quickly can the oil be released?<\/h2>\n
![\"pakistan\"](\"https:\/\/www.aljazeera.com\/wp-content\/uploads\/2026\/03\/AFP__20260312__A2YE29G__v3__MidRes__TopshotPakistanWarIranUsIsraelEconomyOil-1773400161.jpg?w=770&resize=770%2C513&quality=80\")
Is it the \u2018right\u2019 type of oil?<\/h2>\n
\n
![\"INTERACTIVE](\"https:\/\/www.aljazeera.com\/wp-content\/uploads\/2026\/03\/INTERACTIVE-Different-types-of-crude-oil-March-13-2026-1773391867.png?quality=80\")
Will 400,000 barrels of oil be enough in the longer term?<\/h2>\n
![\"INTERACTIVE](\"https:\/\/www.aljazeera.com\/wp-content\/uploads\/2026\/03\/INTERACTIVE-Strait-of-Hormuz-March-2-2026-1772714221.png?quality=80\")
What other measures has the US taken to ease economic fallout from the Iran war?<\/h2>\n
<\/p>\n","protected":false},"excerpt":{"rendered":"