When 32 countries this week moved to tap their emergency crude oil stockpiles to steady soaring oil prices, the gesture was quickly overshadowed by Iran’s escalating strikes in the Strait of Hormuz.
Members of the International Energy Agency (IEA), a coalition of major energy‑consuming nations, agreed to release hundreds of millions of barrels from their strategic oil reserves. Instead of helping prices fall, Brent crude hovered around $100 (€87.30) a barrel toward the end of the week, after spiking briefly to $119.50 on Monday.
Around the announcement, Iran intensified attacks near or in Hormuz, striking multiple commercial vessels — including oil tankers and cargo ships — with projectiles, drones and explosives. Since the war started on February 28, Tehran has effectively blockaded the narrow strait, used by Gulf nations to export a fifth of the world’s crude oil and gas, mostly to Asia, halting almost all tanker traffic. Major regional producers, including Saudi Arabia, Iraq, Kuwait and the United Arab Emirates, have also cut output as domestic storage nears capacity, further raising concerns about energy market stability.
What is a strategic oil reserve?
A strategic oil reserve is a government-controlled stockpile of crude oil held for use during supply disruptions or market emergencies. The first modern reserve was created by the United States in 1975 after the Arab oil embargo exposed the vulnerability of global energy supplies. That shock quadrupled the price of oil, triggered fuel shortages across the West and showed how vulnerable economies were to sudden supply cuts.
Today, dozens of countries — mostly IEA members — maintain strategic reserves as part of a coordinated system to protect energy security. Together, IEA members maintain over 1.2 billion barrels of public emergency reserves, supplemented by roughly 600 million barrels held by industry.
China is believed to hold the world’s largest strategic oil reserves at about 1.3 billion barrels, according to energy and shipping analytics firm Vortexa, though Beijing keeps exact figures tightly controlled. That cache is thought to be enough to power the Chinese economy for up to three to four months. The US federal stockpile stands at 415 million barrels, backed by about 439 million barrels held privately, equating to more than 40 days of emergency supply.
How much oil have IEA members agreed to release?
The IEA said members would release 400 million barrels from their emergency stockpiles. By comparison, after Russia invaded Ukraine in 2022, the previous record release was 182 million barrels. The Paris-based agency said stocks would be made available gradually based on each country’s circumstances.
The US will lead with a contribution of 172 million barrels from its Strategic Petroleum Reserve (SPR), starting next week, with deliveries rolled out over 120 days. Japan said it would release around 80 million barrels, equivalent to about 45 days of domestic supply, drawing from both private-sector and state stockpiles. Other contributors include Germany, Australia, France, South Korea and the United Kingdom.
IEA members are expected to keep around 90 days of emergency stockpiles of net oil imports, with a caveat allowing major exporters like the US to hold less. Pure net exporters such as Canada, Mexico and Norway have no mandatory emergency stockpiles but can tap commercial inventories during crises. The US SPR is made up exclusively of crude oil stored in underground salt caverns along the Gulf Coast; other countries, especially in Europe, keep more diverse products, including petroleum, diesel and jet fuel, in their strategic reserves.
China, not a full IEA member, has made no similar announcement and is prioritizing domestic supply security by halting refined fuel exports. Beijing’s latest five‑year economic plan calls for further expanding its strategic oil reserves, continuing years of heavy stockpiling.
Will the reserves help bring oil prices down?
Oil analysts say tapping strategic reserves can ease immediate market pressure but rarely produces a dramatic or lasting price drop. These releases mainly signal unity and extra supply, reassuring traders that governments will intervene if shortages worsen. The IEA said the release only covers around three to four weeks of lost oil flows from the Gulf region.
Volumes released are small compared with the roughly 100‑million‑barrel‑a‑day global oil market, so effects are expected to be limited. Analyst David Morrison of Trade Nation told AFP that if the simultaneous moves were “supposed to cap prices, then they failed dismally,” adding markets may have read the gesture as “panic,” given Iran’s de facto shutdown of the Hormuz chokepoint. Capital Economics warned prices could rise further if Hormuz remains shut, noting a prolonged conflict could cause losses greater than the total reserves directly held by IEA members.
