IEA to release 400M barrels of oil from strategic reserves to combat high prices
The International Energy Agency agreed to release a historic 400 million barrels of oil from its strategic reserves as the Iran War continues to hinder the oil supply chain and send oil prices skyrocketing, CNBC reports.
The war is causing a chokehold on the Strait of Hormuz, which is a major oil shipping lane under Iran’s and Oman’s control. About a fifth of the world’s oil supply moves through the strait.
Crude oil prices remained relatively stable following the announcement. Crude oil prices closed on Tuesday at just above $82 a barrel, lower than the $115 a barrel seen directly after Israel and the U.S. began their strikes.
Gas prices have risen alongside crude oil prices, reaching levels Americans haven’t seen since 2024, according to historical data. However, it is still much lower than gas prices were in June 2022, when they averaged more than $5 per gallon.
When will reserves hit the market?
IEA officials said they would release oil reserves in a timeframe that’s appropriate for its member nations, CNBC reports. The 32 countries that comprise the IEA actively work to maintain global energy security.
The IEA was founded after the 1973 oil crisis, when the Organization of Arab Petroleum Exporting Countries implemented a total oil embargo for countries that supported Israel in the 1973 Yom Kippur War.
Fatih Birol, the executive director of the IEA, stated that the release aims to address the immediate impacts of the disruption in oil supply, CNBC reports. However, he said that ships must resume traffic through the Strait of Hormuz to reconstruct a stable oil and gas supply for the global market.
Iran has threatened to continue oil supply disruptions, saying on Tuesday that it could send the price of crude oil to more than $200 a barrel. Some reports have stated that the country has begun laying mines around the Strait of Hormuz.
Before the reports were publicized, President Donald Trump said the U.S. would respond overwhelmingly to Iran’s continued disruptions.
“If Iran has put out any mines in the Hormuz Strait, and we have no reports of them doing so, we want them removed, IMMEDIATELY!” he wrote on Truth Social. “If for any reason mines were placed, and they are not removed forthwith, the Military consequences to Iran will be at a level never seen before.”
Ella Rae Greene, Editor In Chief
