Member states, including the United Kingdom, Germany, and France, have outlined their respective contributions. Germany will release nearly 20 million barrels of oil reserves. The United Kingdom will contribute 13.5 million barrels of crude oil, and French President Macron stated that the release will be arranged within the next few days. On the same day, U.S. President Trump stated that the U.S. government is working to maintain the flow of oil supplies. "The IEA's release of strategic petroleum reserves will significantly lower oil prices. Oil prices will continue to fall, but we will not withdraw early (from Iran)."
To address the oil price surge triggered by the U.S.-Israel conflict with Iran, the International Energy Agency (IEA) has approved the largest-ever emergency oil reserve release plan in history.
According toCCTV NewsOn Wednesday, March 11, Fatih Birol, Executive Director of the IEA, announced that the 32 member countries of the IEA had agreed to release 400 million barrels of strategic petroleum reserves. This volume far exceeds the 183 million barrels released by member states following the Russia-Ukraine conflict in 2022.
Fatih Birol stated that the decision was unanimously approved, but he did not specify the pace, duration, or locations of the planned release—details that are critical for energy markets. In a statement, Birol remarked:
The scale of the challenges facing the oil market is unprecedented, and IEA member countries have responded with unprecedented emergency collective action.
Member countries, including the United Kingdom, Germany, and France, outlined their respective contributions.According to CCTV reports,Germany will release nearly 20 million barrels of oil reserves. It was reported that the UK will contribute 13.5 million barrels of crude oil, and French President Macron stated that the release would be arranged within the coming days.
U.S. President Trump stated on the same day that the U.S. government is working to maintain the flow of oil supplies. He commented:
The release of strategic oil reserves by the IEA will significantly lower oil prices. Oil prices are falling and will continue to fall. Prices will keep dropping, but we won't leave (Iran) prematurely.
Following the announcement, oil prices briefly retreated before rebounding slightly. With oil shipments through the key Strait of Hormuz in the Persian Gulf largely halted, crude oil prices surged to $120 per barrel on Monday.
Currently, the 32 member countries of the IEA hold over 1.2 billion barrels of public emergency reserves, including the largest buffer stock, the U.S. Strategic Petroleum Reserve. An additional approximately 600 million barrels are under government-controlled corporate inventories. Member countries are required by regulations to maintain reserve levels equivalent to at least 90 days of net imports.
The IEA has previously implemented five collective reserve releases, occurring before the Gulf War in 1991, after Hurricanes Katrina and Rita in 2005, following the outbreak of the Libyan civil war in 2011, and twice during the supply shocks triggered by the Russia-Ukraine conflict in 2022.
Several countries have disclosed specific contribution amounts, but implementation details remain uncertain.
According to reports, multiple member countries have already announced their respective shares: Japan has pledged to release approximately 80 million barrels, South Korea plans to release 22.5 million barrels, Germany around 19.5 million barrels, France up to 14.5 million barrels, and the UK will contribute 13.5 million barrels.
Katarina Reiche, Federal Minister for Economic Affairs and Energy of Germany, stated at a press conference that this move aims to send a clear signal to the market to curb high-risk premiums and speculative profits. Katarina Reiche added:
If market concerns about supply shortages ease, oil prices will decline.
The German government also announced that it would impose restrictions on fuel pricing mechanisms at gas stations, allowing prices to be raised only once per day, while reductions remain unrestricted.
Fatih Birol, Executive Director of the International Energy Agency, did not disclose critical details such as the pace, time span, and geographic distribution of the release, which are vital for energy markets. The IEA has also not yet published the specific breakdown between crude oil and refined products.
In the last collective release in 2022, crude oil accounted for 73%, and refined products made up 27%, with diesel-type fuels being the largest component of refined products. The United States contributed the most with 90.6 million barrels, all of which was crude oil.
According to Bloomberg, traders and analysts from major commodity trading firms and hedge funds privately estimated a wide range of market entry rates, mostly between 2 million and 4 million barrels per day, with some estimating a low of approximately 1.2 million barrels per day. Homayoun Falakshahi, senior analyst at Kpler, stated:
The devil is in the details, and the key issue lies in the speed of release.
The supply gap is enormous, and reserves may be insufficient to fill it.
From the perspective of the supply-demand gap, doubts remain in the market regarding whether this reserve release can effectively compensate for the market shortfall.
According to estimates by Citigroup, daily supply losses in the Persian Gulf range from 11 million to 16 million barrels. Even if the U.S. Strategic Petroleum Reserve (SPR) operates at maximum extraction rates, combined with contributions from other IEA member countries, it may only cover a portion of the shortfall.
Current U.S. crude oil reserves stand at approximately 415 million barrels, slightly more than half of full capacity. According to the U.S. Department of Energy, the maximum daily withdrawal capacity of the U.S. Strategic Petroleum Reserve is 4.4 million barrels, but it takes 13 days from the president’s decision to the actual arrival of oil in the market.
According to Bloomberg, Natasha Kaneva, head of JPMorgan's commodity market strategy, noted in a previous research report that the United States is "very likely to provide the largest share in any single release."
Meanwhile, the actual blockade effect of the Strait of Hormuz has spread upstream. Oil storage tanks in Persian Gulf countries are nearing full capacity, and major producers such as Saudi Arabia, the UAE, and Iraq are successively increasing production cuts, with a total reduction accounting for approximately 6% of global output.
On the demand side, the impact on Asian importers is significantly greater overall compared to Europe and the United States, but the tightness in various types of oil products varies. The European aviation kerosene market is particularly strained, with data from General Index showing that the premium of this fuel relative to crude oil rose to nearly $90 per barrel on Tuesday.
Editor/Stephen
