The International Energy Agency has agreed to release 400 million barrels of oil from emergency reserves—the largest such release in history—to address supply disruptions. The IEA's proposal to release strategic oil reserves was approved by its 32 member states, with G7 nations backing a release of 400 million barrels. The release was proposed by the IEA and unanimously agreed by its 32 member countries, including the US, UK, Germany, Austria, Japan, and Sweden. However, the IEA has not commented on the reports of the oil release, and Reuters sources indicate the recommendation will be made public on Wednesday. The IEA is expected to decide on a record release of oil reserves on Wednesday, following reports that traffic in the Strait of Hormuz has nearly stopped, The Wall Street Journal via Sveriges Radio Nyheter reports.
Specific contributions to the oil release include: the US releasing 172 million barrels, the UK 13.5 million barrels, Japan 80 million barrels (equivalent to 45 days of domestic demand), and Finland 1.572 million barrels. Germany is contributing 2.4 million metric tons (about 17.9 million barrels) to the oil release. Japan is releasing 80 million barrels of oil from its reserves. French President Emmanuel Macron announced additional reserves beyond the 14.5 million barrels in the IEA plan.
Oil prices have been volatile: Brent crude surged to nearly $120 a barrel on Monday but fell to around $88-91 per barrel on Wednesday, though still about 20-25% higher than pre-conflict levels. Brent futures rose 26% to US$116.38, potentially the biggest single-day climb since 1988. Spot prices dropped from a peak of US$119.50 but remained up 8% over Friday. Oil prices rebounded as markets doubted the IEA plan could offset disruptions. Analysts note the daily release pace (e.g., 3.3 million barrels per day if 100 million barrels over a month) is a fraction of the current disruption of around 20 million barrels per day due to the Strait of Hormuz blockage.
Iran has attacked commercial ships in the Strait of Hormuz, effectively halting cargo traffic through the strait, which normally carries about one-fifth of global oil supplies (around 15-20 million barrels per day). A Thai container ship was hit by a projectile and caught fire in the strait, with 20 crew rescued and three remaining, according to the Thai navy. Two other ships were hit by projectiles on Wednesday. Iran has been accused of mining the Strait of Hormuz, with the US military destroying 16 Iranian minelayers. President Trump said there are no confirmed reports of mining. Experts say clearing mines could take weeks. Some ship traffic continues through the strait, with seven ships passing since 8 March, five linked to Iranian-associated shipping, per security firm Neptune P2P Group.
Natural gas prices increased 30% due to the Strait of Hormuz closure, affecting 20% of LNG traffic, with European gas prices doubling since the war began. Markets declined, with the FTSE 100 down 1.1%, DAX off 1.4%, and CAC 40 down almost 2%. Economists predicted no quick reversal of energy costs as attacks on oil infrastructure continue. The IEA is calling this the largest supply disruption in global oil market history.
Iran aims to force triple-digit oil prices to pressure the U.S. and Israel, warning of long-lasting economic consequences.
Countries are implementing fuel-saving measures such as school closures in Pakistan and Bangladesh, remote work in Vietnam and Pakistan, and air conditioning limits in Thailand. Flight disruptions include Qantas rerouting Perth-London flights via Singapore, adding three hours. Panic buying at fuel pumps is occurring in some countries. Japan has introduced subsidies to cap gasoline prices and advised against hoarding toilet paper due to consumer anxiety.
The conflict began on 28 February with US and Israeli attacks on Iran, leading to Hezbollah firing rockets at Israel and drawing Lebanon into the war. In Lebanon, over 570 people have been killed since the conflict started, including more than 80 children, with at least 10 killed in an Israeli attack on an eastern Lebanese city on Wednesday, according to Lebanon's health department and media reports. Over 780,000 people (more than a tenth of Lebanon's population) have been displaced, per Lebanese authorities and AP. Israel's military states its attacks target Hezbollah infrastructure in southern Beirut suburbs.
Iran's parliament head Mohammad Baqer Ghalibaf claimed Iran aims to force triple-digit oil prices to pressure the U.S. and Israel, warning of long-lasting economic consequences. U.S. President Donald Trump praised the G7's impact, though it was unclear if he referred to the oil release or the war. Iran's Tasnim News reports Iran warns people in the Middle East to stay away from banks linked to the US or Israel, as Iran will target them in response to attacks on an Iranian bank.
The G7 held emergency talks on oil prices and asked the IEA to assess the situation, but did not immediately agree to release reserves itself. Several Western countries, including Sweden, are now opening their oil reserves after the International Energy Agency (IEA) requested 400 million barrels of oil. The IEA called for a coordinated release of oil reserves during a G7 ministers' meeting.
The US Strategic Petroleum Reserve holds about 415 million barrels, less than 60% full, according to the Department of Energy.