The 32 member countries of the International Energy Agency (IEA) are expected to release a collective 400 million barrels of oil from their strategic reserves in a bid to cool market prices.
This has been billed as its largest ever oil release. It’s more than double the 182 million barrels released by the IEA in 2022 after the Ukraine war broke out, four times the world’s daily usage and about a third of its members’ total stash.
Will it make a difference? What we must look at is the flow of oil, not its stock. On average, 2025 saw about 14 million barrels of crude oil (and 5 million barrels of oil products) exit the Gulf daily via Hormuz. By one estimate, IEA stocks can flow out at a daily maximum rate of 3 million barrels, and that too only after a while. Other sources and Hormuz-bypass pipelines could add to market supply, but the world would still be left with a shortfall.
Moreover, shortages have a ‘buffering’ effect, with time lags, so the war’s price shock may last even after Iran’s choke eases. This prospect isn’t looking too bright right now, unfortunately, a reminder of the perils of waging war. In a cost-conscious world, it’s truly remarkable how often the cost of war is underestimated.