IEA Weighs Record Oil Reserve Release to Counter Supply Shock
FILE - Fishermen work in front of oil tankers south of the Strait of Hormuz Jan. 19, 2012, offshore the town of Ras Al Khaimah in United Arab Emirates. (AP Photo/Kamran Jebreili, File)
Oil markets could soon face a record surge in supply, the Wall Street Journal reports. The International Energy Agency has proposed its largest-ever coordinated release of emergency oil reserves to counter a price spike linked to the US-Israel conflict with Iran and the near-shutdown of the Strait of Hormuz, a key route that handles about 20% of global oil shipments.
The plan, circulated Tuesday among the IEA’s 32 member countries, would surpass the 182 million barrels released after Russia’s 2022 invasion of Ukraine. It will take effect only if no member objects when countries weigh in Wednesday. Sources tell CNBC that the US supports a joint release of 300 million to 400 million barrels, equivalent to roughly 25%–30% of the 1.2 billion barrels held in reserve by member nations, which are primarily located in North America, Europe, and Northeast Asia.
Oil prices briefly exceeded $100 a barrel after strikes on Iran began on February 28, but ended Tuesday below $84. Despite the drop, fuel prices remain high, and economists warn that a prolonged spike could drive inflation and unsettle markets. Prices fell slightly again Wednesday following the Journal’s report, according to Reuters.
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