IEA agrees to release 400 million barrels of oil to address Iran war supply disruption

The International Energy Agency (IEA) announced on Wednesday that it will release 400 million barrels of oil to help with the supply issues caused by the Iran war. This is the largest action ever taken by the IEA. However, the agency did not specify when this oil would be available in the market. The release will happen at a pace that suits each of the 32 member countries. IEA Executive Director Fatih Birol said in a statement, “The challenges in the oil market are unlike anything we have seen before, so I am pleased that IEA member countries have come together for such a large emergency action.” He emphasized that since oil markets are global, the response to significant disruptions must be global as well. Birol also noted, “Energy security is the main purpose of the IEA, and I am happy that our members are united in taking strong action together.” Experts warned that even with the IEA’s full capacity, it may not be enough to cover the nearly 20 million barrels per day that usually pass through the Strait of Hormuz. This narrow waterway off Iran’s coast links the Persian Gulf to the Gulf of Oman and carries about 20% of the world’s oil and gas. Since the Iran war began on February 28, oil prices have fluctuated wildly, with the global benchmark Brent crude reaching almost $120 a barrel at the start of the week before dropping below $90. Earlier in the day, Japanese Prime Minister Sanae Takaichi announced that Japan plans to release oil from its national reserves as soon as next week due to its “exceptionally high level of dependence” on the Middle East. Takaichi told reporters, as reported by public broadcaster NHK, “Without waiting for an official decision on the release of international stockpiles with the IEA, Japan has decided to start releasing its own reserves as early as the 16th of this month to help balance supply and demand in the global energy market.”