International Energy Agency has decided to release oil reserves

On Wednesday, March 11, IEA member countries unanimously agreed to release a record 400 million barrels of crude oil to the market. This move is a response to the soaring price of the commodity amid the ongoing war between the United States and Israel against Iran. For comparison, the last time such a measure was taken—following Russia’s invasion of Ukraine in February 2022—the decision involved releasing 182 million barrels of oil.

Discussions regarding the release of IEA reserves were coordinated with the G7. On Wednesday morning, the energy ministers of the G7 countries issued a joint statement: “In principle, we support the implementation of proactive measures to address the situation, including the use of strategic reserves.”

The 400 million barrels represent roughly one-third of the government-held reserves of IEA member states. These countries are required to maintain oil stocks equivalent to 90 days of net imports. Such reserves can be released to the market when necessary. The release is expected to take place over at least two months. IEA Executive Director Fatih Birol is yet to provide specific dates.

The International Energy Agency was established in 1974 in response to the previous year’s oil crisis. The organization’s primary mission is to respond to disruptions in oil supply. Following the announcement of this decision, a temporary decline in oil prices can be expected. Investor sentiment is currently being shaped by media headlines and the constant flow of new and varied information, causing market prices for crude oil to fluctuate.