IEA Deploys Historic 400 Million Barrel Oil Reserve to Stabilise Markets After Iran War Disruption

The IEA authorised a coordinated release of 400 million barrels from emergency oil stocks in response to the Iran war's impact on the Strait of Hormuz, aiming to stabilise markets and support energy security for member nations and wider markets. The move underscores the role of strategic reserves in price stability.

The International Energy Agency agreed to deploy 400 million barrels from emergency oil reserves after the Iran war choked supplies through the Strait of Hormuz, marking the largest stock release in the IEA’s history and a major attempt to calm extreme price swings and protect energy security for its 32 member countries and wider global markets.

The agency said there was no fixed timetable for when the barrels would reach buyers. Instead, each member government would decide a release schedule that matched national needs and local logistics. IEA members span Europe, North America and northeast Asia, and the group coordinates joint responses when global energy supplies face serious disruption.

IEA oil release and impact of the Iran war on global energy

IEA Executive Director Fatih Birol, speaking from the organisation’s Paris headquarters, linked the move directly to the conflict. “The conflict in the Middle East is having significant impacts on global oil and gas markets, with major implications for energy security, energy affordability and the global economy for oil,” Birol said, describing severe pressure on consumers and governments worldwide.

Birol stressed that the emergency stocks were meant to cushion near-term shortages rather than fully replace lost flows. “I can now announce that IEA countries have unanimously decided to launch the largest-ever release of emergency oil stocks in our agency's history,” Birol said, calling it a coordinated step to stabilise markets while physical shipments remained blocked.

IEA oil release, Strait of Hormuz shutdown and supply shortfall

The main cause of the supply shock was the shutdown of tanker traffic through the Strait of Hormuz, a narrow sea route off Iran’s coast that links the Persian Gulf with the Gulf of Oman. Around 20% of the world’s oil and gas usually passes this corridor, but commercial ships largely stopped sailing as companies feared Iranian attacks.

Consultancies Rapidan Energy Group and Wood Mackenzie assessed the closure as the largest oil supply disruption ever recorded. Their analysis indicated that about 20 million barrels per day, which typically travelled through the Strait, had been removed from the market. Analysts warned before the IEA move that even a maximum stock draw might not fully balance such a large daily loss.

IEA oil release scale, emergency stocks and LNG pressure

According to the IEA, member governments held more than 1.2 billion barrels of public emergency oil stocks. A further 600 million barrels sat in industry storage that companies were required to maintain under national rules. Together, these inventories formed the pool from which the 400 million barrels would be sourced during the coordinated response.

Birol also highlighted strains on natural gas. The global liquefied natural gas supply had dropped by 20%, the IEA chief said, as war-related risks and shipping issues disrupted flows. That cut forced wealthier Asian countries to bid against European buyers for limited LNG cargoes. Natural gas, often used for power generation and home heating, therefore became more expensive and harder to secure.

IEA oil release, Middle East output cuts and infrastructure attacks

Birol said the war’s effects went beyond the blocked sea lane. Middle East producers reduced output, while disruption hit refinery operations, especially affecting diesel and jet fuel availability. Refined product supplies tightened just as attacks continued to damage energy facilities and related infrastructure, making repairs difficult and raising the risk of further outages across the region.

The IEA chief warned that long-term stability still depended on restoring normal shipping. Tanker movements through the Strait of Hormuz needed to restart to bring steady oil and gas flows back to world markets, Birol said. Until then, emergency stocks would act as a buffer, but they could not fully substitute for unrestricted passage through such an important route.

IEA oil release and Japan’s response to Iran war disruption

Individual IEA members also moved on national reserves. Earlier the same day, Japanese Prime Minister Sanae Takaichi said Japan planned to start releasing oil from its own strategic stocks as early as the following week. Takaichi cited Japan’s “exceptionally high level of dependence” on Middle Eastern supplies as the reason for acting quickly to support domestic energy security.

The IEA itself was set up in 1974 after the oil embargo by Arab exporters during the 1973 Arab-Israeli war, when supplies to nations supporting Israel, including the United States, were restricted. Since then, the agency had coordinated collective stock releases several times, but never on a scale matching the 400 million barrels now approved in response to the Iran war.

Oil prices swung sharply as the conflict unfolded. Since the Iran war began on 28 February, global benchmark Brent crude climbed to almost $120 per barrel at the start of the week before easing back to around $90. Traders reacted to every sign of risk in the Strait of Hormuz, and the IEA’s decision aimed to temper some of that volatility.