The International Energy Agency (IEA) has proposed the largest release of emergency oil reserves in its history, a move prompted by escalating concerns over supply disruptions linked to the conflict involving the U.S., Israel and Iran. The proposal, circulated Tuesday during an emergency meeting of the IEA’s 32 member countries, aims to counter surging crude prices, according to officials familiar with the matter.
The proposed release is expected to exceed the 182 million barrels IEA member countries released in two phases in 2022 following Russia’s invasion of Ukraine, the Wall Street Journal reported. A decision on the proposal is anticipated Wednesday.
Oil prices experienced volatility Tuesday following reports of the potential release, with initial gains reversed. Brent futures traded up briefly before falling back to around $88 a barrel, while U.S. West Texas Intermediate (WTI) also saw initial gains erased, settling at $83.52 a barrel. The fluctuations reflect market sensitivity to supply concerns amid heightened geopolitical tensions.
The move comes as the U.S. And Israel have conducted intensified airstrikes against Iran, and as the U.S. Military reported eliminating 16 Iranian mine-laying vessels near the Strait of Hormuz. President Donald Trump has stated the U.S. Is prepared to escort tankers through the Strait if necessary, though sources indicate the U.S. Navy has, for now, declined requests from the shipping industry for military escorts due to the perceived high risk of attacks.
Saudi Arabia, the world’s largest oil exporter, is reportedly increasing supplies via the Red Sea, but current levels remain insufficient to offset the reduction in flows through the Strait of Hormuz, according to shipping data. The jamming of signals has further complicated and endangered vessel traffic in the area.
The Group of Seven nations had previously requested the IEA to prepare scenarios for releasing emergency oil stockpiles, signaling a coordinated effort to stabilize global energy markets. French Finance Minister Roland Lescure stated Tuesday that countries are prepared to deploy reserves if needed, and have tasked the IEA with studying potential release volumes.
The U.S. Strategic Petroleum Reserve (SPR), the world’s largest supply of emergency crude oil, holds a storage capacity of 714 million barrels in four underground salt caverns along the Gulf Coast, according to the U.S. Department of Energy.
IEA officials in Paris have not yet responded to requests for comment outside of working hours. The proposal could face delays if any member country objects.
