Frank Okon

The International Energy Agency has approved a record release of emergency oil reserves as the war in the Middle East threatens global energy supplies and drives crude prices sharply higher.

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The agency said March 11 that its 32 member countries unanimously agreed to make 400 million barrels of oil available from strategic reserves to stabilize markets disrupted by the conflict in the Gulf region. The coordinated move is the largest emergency stock release in the IEA’s history.

The decision comes as fighting involving Iran, Israel and the United States has disrupted shipping and raised fears of prolonged supply interruptions through the Strait of Hormuz, a key route for global crude exports.

“The conflict in the Middle East is having significant impacts on global oil and gas markets, with major implications for energy security, energy affordability and the global economy,” said Fatih Birol, executive director of the IEA.

The release more than doubles the previous IEA record set in 2022, when member countries supplied 182.7 million barrels from reserves following the Russian invasion of Ukraine. Under IEA rules, member countries must maintain emergency oil stocks equivalent to at least 90 days of net imports, allowing the agency to respond quickly when major supply disruptions occur.

Despite the planned release, traders remain uncertain whether strategic reserves alone will offset potential losses if exports from the Gulf remain constrained for an extended period. Around a fifth of the world’s oil supply moves through the Strait of Hormuz, making any disruption there a major concern for global markets.

Earlier in the day, Sanae Takaichi, prime minister of Japan, said Tokyo could begin drawing on its own strategic oil reserves as early as next week, citing the country’s heavy reliance on Middle Eastern crude.

Meanwhile, the U.S. Energy Information Administration reported that U.S. crude oil inventories rose by 3.8 million barrels in the week ended March 6. Excluding the Strategic Petroleum Reserve, total U.S. crude stocks stood at 443.1 million barrels, about 2 percent below the five-year average for this time of year.

Gasoline inventories fell by 3.7 million barrels but remained about 5 percent above the seasonal average, while distillate fuel stocks declined by 1.3 million barrels and were roughly 2 percent below the five-year average. Propane-propylene inventories dropped by 1.7 million barrels but were still 53 percent higher than the five-year average.

Refinery activity also increased. U.S. crude refinery inputs averaged 16.2 million barrels per day during the week, up 328,000 barrels per day from the previous week, with refineries operating at 90.8 percent of capacity.

Gasoline production rose to an average of 9.9 million barrels per day, while distillate fuel output increased to 4.9 million barrels per day.

U.S. crude oil imports averaged 6.4 million barrels per day, up slightly from the previous week. Over the past four weeks, imports averaged about 6.5 million barrels per day, roughly 12.6 percent higher than the same period last year.