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A group representing many of the world’s wealthiest countries agreed Wednesday to release the largest volume of emergency oil reserves in its history, in a bid to counter the effects of the Iran war on energy markets and the halt of cargo shipping through the Strait of Hormuz.
The Paris-based International Energy Agency said it will make 400 million barrels of oil available from its members’ emergency reserves, which is more than double the 182.7 million barrels that the IEA’s 32 member countries released in 2022 in response to Russia’s full-scale invasion of Ukraine.
“This is a major action aiming to alleviate the immediate impacts of the disruption in markets,” IEA Executive Director Fatih Birol said. “But, to be clear, the most important thing for a return to stable flows of oil and gas is the resumption of transit through the Strait of Hormuz.”
Iran has attacked commercial ships across the Persian Gulf in response to U.S. and Israeli strikes, escalating a campaign of squeezing the oil-rich region as global energy concerns mount and effectively stopping cargo traffic in the narrow strait, through which about one-fifth of the world’s liquid petroleum products pass through. Iran has also targeted oil fields and refineries in Gulf Arab nations, aiming to generate enough global economic pain to pressure the U.S. and Israel to end their strikes.
According to the IEA, export volumes of crude and refined products are currently at less than 10% of prewar levels. Birol noted that the situation in natural gas markets is also very challenging, with Asia the most severely affected region.
A push to lower the price at the pumps
The IEA’s announcement came a day after energy ministers from the Group of Seven—the leading industrialized nations of Canada, the U.S., France, Italy, Japan, Germany and Britain—met in Paris to look at ways to bring down prices. It also came just before G7 leaders, including U.S. President Donald Trump, met via videoconference on Wednesday..
During his introductory remarks during Wednesday’s video call, French President Emmanuel Macron praised the IEA decision to release emergency oil stocks, saying it is “very important” to do everything possible to increase global production and that the 400 million barrels amounted to the equivalent of “20 days of the volume being exported through the Strait of Hormuz.”
