IEA set to urge unprecedented stockpile oil release to lower crude prices

The International Energy Agency is set to request the biggest drawdown of state oil reserves ever recorded, aiming to soothe the price surge sparked by the US‑Israeli strikes on Iran.

The global energy monitor is anticipated to urge its 32 members to free roughly 400 million barrels of emergency crude—about one‑third of the collective government holdings and over twice the size of the IEA’s prior largest release.

The urgent action, initially disclosed by the Wall Street Journal, would far exceed the 182 million barrels that IEA nations placed on the market in two batches in 2022 following Russia’s full‑scale invasion of Ukraine.

According to the proposal, the agency’s 32 member states could have as much as 90 days to inject oil inventories into the world market, which has been short of nearly 20 million barrels daily due to a trade blockage through the Strait of Hormuz.

The Paris‑based body is slated to release its advice at 1300 GMT on Wednesday, ahead of a 1400 GMT gathering of G7 leaders chaired by French President Emmanuel Macron.

The coalition of seven major economies announced Wednesday morning its provisional backing for tapping strategic oil reserves to tackle supply disruptions and market swings.

Sources indicate the plan first circulated during a Tuesday emergency session of energy officials from IEA member states, who debated releasing their emergency stocks after some of the sharpest oil price hikes on record.

Later that day, G7 energy ministers convened a separate virtual meeting with the IEA chief to consider releasing the emergency oil stocks in an effort to steady the market.

Nevertheless, the disbursement could be postponed if a single IEA member voices opposition at Wednesday’s session.

Participants in the alliance—formed after the 1970s Middle East oil crisis—must maintain reserves equal to at least 90 days of crude, which may be tapped during a supply shock.

Altogether, IEA members possess over 1.2 billion barrels of public emergency oil and an additional 600 million barrels kept by industry under state mandates.

The United Kingdom reported 120 days of oil inventories at the close of last year, all of which were stored by private firms under a government pact. These reserves sit in refineries, terminals, power plants and offshore North Sea fields. Roughly 15 % of the stock is located abroad, notably in the Netherlands, Belgium and Germany.

While no G7 nation has experienced an actual oil shortage since the conflict erupted last month, Brent crude prices have swung dramatically, briefly soaring to $119.50 per barrel on Monday—levels not observed since 2022.

Oil and seaborne gas shipments from the Middle East have found it difficult to reach world markets for nearly two weeks due to the effective shutdown of the strait.