To address the surge in oil prices triggered by the war between the U.S. and Israel and Iran, the International Energy Agency (IEA) has approved the largest emergency oil reserve release plan in history.
According to CCTV News, on Wednesday, March 11, IEA Director Fatih Birol stated that the 32 member countries of the IEA have agreed to release 400 million barrels of strategic oil reserves. This scale far exceeds the 183 million barrels of crude oil released by member countries after the Russia-Ukraine conflict in 2022.
Fatih Birol indicated that the decision was unanimously approved, but he did not specify the speed, duration, and location of the planned release, details that are crucial for the energy market. Birol stated in a declaration:
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We are facing unprecedented challenges in the oil market, and the member countries of the IEA have taken unprecedented collective emergency action to respond.
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Member countries, including the UK, Germany, and France, outlined their respective contributions. According to CCTV reports, Germany will release nearly 20 million barrels of oil reserves. Reports indicate that the UK will contribute 13.5 million barrels of crude oil, and French President Macron stated that the release work will be arranged in the coming days.
On the same day, U.S. President Trump stated that the U.S. government is working to maintain the flow of oil supply. Reports indicate that the U.S. will begin releasing 172 million barrels of oil from its strategic oil reserves next week. Based on the established release rate, this process is expected to last about 120 days. Trump believes:
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The IEA's release of strategic oil reserves will significantly lower oil prices. Oil prices are falling and will continue to fall. Oil prices will (continue to) drop, but we will not leave (Iran) prematurely.
After the IEA announced the release of record oil reserves, oil prices briefly fell and then rose slightly again. Following the announcement of the scale of the strategic petroleum reserve released by the United States, crude oil continued to rise, ignoring the news, with WTI crude oil returning to the $90 mark.
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Due to the near halt of oil transportation through the critical Strait of Hormuz in the Persian Gulf, crude oil prices soared to $120 per barrel on Monday.
Currently, the IEA's 32 member countries hold over 1.2 billion barrels of public emergency reserves, including the largest buffer reserve, the U.S. Strategic Petroleum Reserve. Additionally, there are about 600 million barrels of government-controlled corporate inventories. Member countries are required to maintain reserves equivalent to at least 90 days of net imports.
The IEA has previously implemented collective reserve releases five times, occurring before the Gulf War in 1991, after Hurricane Katrina and Rita in 2005, after the outbreak of the Libyan civil war in 2011, and twice in 2022 due to supply shocks from the Russia-Ukraine conflict.
<h2>Multiple countries have disclosed specific contribution amounts, but implementation details remain uncertain</h2>
According to reports, several member countries have announced their respective shares: Japan has committed to releasing about 80 million barrels, South Korea plans to release 22.5 million barrels, Germany about 19.5 million barrels, France up to 14.5 million barrels, and the UK contributing 13.5 million barrels.
German Federal Minister for Economic Affairs and Energy, Katrin Göring-Eckardt, stated at a press conference that this move aims to send a clear signal to the market to curb high-risk premiums and speculative profits. Katrin Göring-Eckardt said:
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If market concerns about supply shortages diminish, oil prices will fall.
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The German government also announced that it would impose restrictions on fuel pricing mechanisms at gas stations, allowing price increases only once a day, while decreases would not be restricted.
IEA Executive Director Fatih Birol did not disclose key details such as the pace, time span, and geographical distribution of this release, which are crucial for the energy market. The IEA has also not announced the specific breakdown ratio between crude oil and refined products.
In the last collective release in 2022, crude oil accounted for 73%, and refined products for 27%, with diesel fuel being the largest component of refined products. The United States contributed 90.6 million barrels, all of which were crude oil.
According to Bloomberg, traders and analysts from large commodity trading firms and hedge funds privately provided estimates of the entry rate that varied widely, mostly between 2 million and 4 million barrels per day, with some giving a low estimate of about 1.2 million barrels per day. Kpler senior analyst Homayoun Falakshahi stated:
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The devil is in the details, and the key issue is the release speed.
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<h2>Huge supply gap, reserves may be difficult to fill</h2>
From the perspective of supply and demand gaps, there are still doubts in the market about whether this reserve release can effectively fill the market void.
According to Citigroup's estimates, daily supply losses in the Persian Gulf reach 11 million to 16 million barrels. Even if the U.S. Strategic Petroleum Reserve (SPR) is drawn at maximum speed, combined with contributions from other IEA member countries, it may only cover part of the gap
The current U.S. crude oil reserves are approximately 415 million barrels, which is more than half of full capacity. According to data from the U.S. Department of Energy, the maximum daily withdrawal capacity of the U.S. Strategic Petroleum Reserve is 4.4 million barrels, but it takes 13 days from presidential decision to the actual oil entering the market.
According to Bloomberg, Natasha Kaneva, head of commodity market strategy at JP Morgan, pointed out in a previous research report that the U.S. &#34;is likely to provide the largest share in any release.&#34;
At the same time, the actual blockage effect in the Strait of Hormuz has spread upstream. Oil storage tanks in the Persian Gulf oil-producing countries are nearing full capacity, and major oil-producing countries such as Saudi Arabia, the United Arab Emirates, and Iraq are successively increasing their production cuts, which collectively account for about 6% of global production.
On the demand side, the impact on Asian importing countries is significantly heavier than that on Europe and the U.S., but the supply tightness of various oil products varies. The European aviation kerosene market is particularly tight; according to General Index data, the premium of this fuel relative to crude oil has risen to nearly $90 per barrel on Tuesday

Member countries, including the UK, Germany, and France, outlined their respective contributions. Germany will release nearly 20 million barrels of oil reserves. The UK will contribute 13.5 million barrels of crude oil, and French President Macron stated that the release will be arranged in the coming days. On the same day, U.S. President Trump indicated that the U.S. government is working to maintain the flow of oil supply. "The IEA's release of strategic oil reserves will significantly lower oil prices. Oil prices will (continue to) fall, but we will not leave (Iran) early."

- To address surging oil prices due to the Israel-Iran conflict, the International Energy Agency (IEA) has approved the largest emergency oil reserve release in history, totaling 400 million barrels.  
- This decision comes after members reported individual contributions, with Germany, Japan, South Korea, and the UK among those committing significant quantities.  
- Despite these efforts, concerns remain regarding the effectiveness of the release in filling a supply gap, estimated by Citigroup at 11 to 16 million barrels per day due to disruptions in the Persian Gulf.

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The IEA approves the release of a record oil reserve, with a scale of 400 million barrels, more than double the level of 2022