Historic oil reserve release is only a band-aid on a gaping supply shock

The International Energy Agency’s plan to release 400 million barrels of oil reserves is unprecedented in scale and desperately needed to blunt the devastating supply shock triggered by the Iran war. But it will offer only limited relief as long as energy exports from the Middle East remain blocked.



The IEA said on Wednesday that its 32 member countries unanimously agreed to move forward with the biggest collective drawdown ever from their strategic petroleum reserves (SPR). The release is more than double the scale of the previous – and until now, largest-ever – coordinated drawdown in March 2022

following Russia’s invasion of Ukraine, when the U.S. released 180 million barrels.



Yet the enormity of the crisis confronting the global oil market today certainly warrants these record-breaking volumes – if not more. Nearly 20 million barrels per day (bpd) of supply – roughly a fifth of global output – have been trapped inside the Gulf since the effective closure of the Strait of Hormuz shortly

after the launch of the joint Israel-U.S. war against Iran on February 28.