IEA Agrees to Release Record 400 Million Barrels of Oil From Reserves

Members of the International Energy Agency (IEA) agreed on March 11 to release 400 million barrels of oil from reserves.

This is the largest withdrawal on record as governments attempt to mitigate the spike in global energy prices.

With global crude demand totaling approximately 100 million barrels per day, the latest supply injection is expected to be enough to cover about four days of consumption.

Oil prices pared some of their gains following the announcement.

The price of a barrel of West Texas Intermediate—the U.S. benchmark for oil prices—rose by more than 2 percent in the middle of the trading week to more than $85 on the New York Mercantile Exchange.

Brent, the global benchmark, jumped in price by 3 percent to about $90 per barrel in overseas markets.

They have eased substantially since topping $115 at the start of the trading week amid U.S. measures and expectations that countries would eventually tap into their inventories.

Hours later, the Department of Energy announced the United States would join the effort, releasing 172 million barrels of oil from the U.S. Strategic Petroleum Reserve beginning next week.

Officials say this will take approximately 120 days to deliver, adding that they plan to replenish domestic stockpiles within a year.

“Unlike the previous administration, which left America’s oil reserves drained and damaged, the United States has arranged to more than replace these strategic reserves with approximately 200 million barrels within the next year—20 percent more barrels than will be drawn down—and at no cost to the taxpayer,” the Department of Energy said in a March 11 statement.

The IEA’s decision comes a day after 32 member governments convened an extraordinary meeting to assess fallout from the Iranian conflict and its impact on global market conditions.

Each country will release its emergency stockpiles into the market over a time frame, and some nations will take additional actions on top of these injections.

“The oil market challenges we are facing are unprecedented in scale, therefore I am very glad that IEA Member countries have responded with an emergency collective action of unprecedented size,” said IEA Executive Director Fatih Birol in a statement.

“Oil markets are global so the response to major disruptions needs to be global too,” Birol said. “Energy security is the founding mandate of the IEA, and I am pleased that IEA Members are showing strong solidarity in taking decisive action together.”

Established in 1974, this is the sixth time that the group has coordinated a release from emergency inventories.

The IEA maintains more than 1.2 billion barrels of oil, and another 600 million barrels of industry stocks under government obligations.

It could take time for actual barrels of oil to reach markets, said Mark Malek, chief investment officer at Siebert Financial.

“Most of these reserves sit in underground salt caverns, not in tanks ready to pour,” Malek said in a note emailed to The Epoch Times. “You have to inject water, pump the oil up, move it through pipelines to terminals, and then ship it. That takes time.”

“[This could be a] pure psychology move, and the market responded to it like a patient responding to a placebo that they believe is real medicine,” Malek said.

Global Coordination

Before the official announcement, several countries revealed plans to tap oil reserves to calm down global energy markets.

Speaking in Berlin on March 11, Katherina Reiche, Germany economy minister, said Berlin would contribute to the agency’s coordinated release.

“The situation regarding oil supplies is tense, as the Strait of Hormuz is currently virtually impassable,” she said.

Reiche said Berlin would act in solidarity with other industrialized countries responding to the crisis.

“We will comply with this request and contribute our share, because Germany stands behind the IEA’s most important principle: mutual solidarity,” she said.

Germany also plans to restrict fuel price increases at service stations to once per day and to tighten antitrust oversight of the sector.

Reiche did not provide a timetable for those steps but said the United States and Japan would be the largest contributors to the reserve release.

The German Ministry for Economic Affairs and Energy said in a March 11 post on X that global oil prices had risen by about 30 percent and confirmed that the government would participate in the coordinated drawdown.

Japanese Prime Minister Sanae Takaichi said on March 11 that Tokyo would tap both private sector and government reserves, totaling 15 days of private stocks and one month of state reserves.

The release will begin on March 16 and be coordinated with the G7 group of leading industrial nations and the IEA to avoid supply disruptions.

Austrian Chancellor Christian Stocker said in a March 9 post on X that officials were examining ways to protect consumers and businesses from rising costs, including a temporary reduction in fuel taxes.

“One thing is clear in this regard: crisis profits at the expense of drivers—meaning people and businesses—must not be allowed,” Stocker said. “Equally clear is this: in such a situation, the state must not become a profiteer of the crisis and enrich itself at the expense of the people who are suffering from the rising prices.”

Eyes on the Strait

The Strait of Hormuz handles an average of 20 million barrels per day of oil and petroleum products, accounting for about 20 percent of international demand.

Tehran has not closed the global chokepoint, but traffic has been significantly disrupted as insurance firms have canceled coverage or raised premiums, and commercial vessels have been reluctant to traverse the area.

It is unclear whether oil and gas tankers are traversing the narrow waterway between Iran and Oman.

U.S. Energy Secretary Chris Wright stated on X on March 10 that the U.S. Navy had escorted a tanker through the passage. However, hours later, White House press secretary Karoline Leavitt confirmed that the Navy had “not escorted a tanker or a vessel at this time.”

“I was made aware of this post,” Leavitt said. “I haven’t had a chance to talk to the energy secretary about it directly. However, I know the post was taken down pretty quickly.”

President Donald Trump had indicated last week that naval escorts could be offered in addition to guaranteed political risk insurance.

Tehran signaled further escalation on March 11. Ebrahim Zolfaqari, spokesperson for Iran’s Khatam al-Anbiya military command headquarters, warned on March 11 that oil prices could soar and shipping could face continued attacks.

“We won’t allow even one liter of oil to reach the U.S., Zionists, and their partners,” Zolfaqari said. “Any vessel or tanker bound to them will be a legitimate target. Get ready for the oil barrel to be at $200 because the oil price depends on the regional security which you have destabilized.”

The IEA estimates that exports of crude and refined products from the region have fallen to less than 10 percent of prewar levels.

The United States, meanwhile, registered its third consecutive weekly storage build.

For the week ending on March 6, crude inventories increased by 3.82 million barrels following the previous week’s injection of 3.48 million barrels, according to the Energy Information Administration.

This came in firmly above the consensus estimate of 1.1 million barrels.