Global Powers Release Record 400 Million Oil Barrels as Iran Crisis Paralyzes Energy Markets

Unprecedented Emergency Response to Supply Crisis

The world's energy watchdog has authorized the largest oil stockpile release in its 50-year history as the ongoing conflict with Iran threatens to push global economies toward recession. The International Energy Agency on Wednesday agreed to release 400 million barrels of oil to address the supply disruption triggered by the Iran war, with its 32 member countries unanimously approving the unprecedented action . The proposed release is larger than the 182 million barrels of oil that IEA member countries released in 2022 after Russia launched its full-scale invasion of Ukraine .

The United States will contribute 172 million barrels of oil from the Strategic Petroleum Reserve starting next week , while the United Kingdom said it would contribute 13.5 million barrels of oil to the IEA release . Germany's economy ministry said the IEA asked Germany to release 2.64 million tons — roughly 19.7 million barrels — of its oil reserves , and Japan also said it will release some of its reserves starting on Monday .

The decision comes as export volumes of crude and refined products are currently at less than 10% of pre-conflict levels through the Strait of Hormuz, the world's most critical energy chokepoint. Traffic is down 90% amid the crisis, with hundreds of ships at anchor off the coasts of major oil exporters such as Saudi Arabia and Iraq .

Iran Effectively Closes World's Most Vital Oil Route

The Strait of Hormuz has experienced ongoing geopolitical and economic disruption since 28 February 2026, following joint military strikes by the United States and Israel on Iran, which included the killing of Iran's supreme leader Ali Khamenei. In response, Iran launched retaliatory missile and drone attacks on US military bases, Israeli territory and other Gulf states, while its Islamic Revolutionary Guard Corps (IRGC) issued warnings prohibiting vessel passage through the strait .

"We will not allow even one liter of oil to pass through the Strait of Hormuz for the benefit of the U.S. and its allies," an Iranian armed forces spokesperson said on Wednesday . Three ships were attacked in the Strait of Hormuz on Wednesday, a British navy-run monitoring service said, the latest in a flurry of attacks on the vital oil choke point. As Iran targets ships with missiles and drones, even attempting to navigate the strategic waterway is currently unthinkable .

According to the US Energy Information Administration (EIA), about 20 million barrels of oil, worth about $500bn in annual global energy trade, transited through the Strait of Hormuz each day in 2024. The crude oil passing through the strait originates from Iran, Iraq, Kuwait, Qatar, Saudi Arabia and the UAE . The strait does not have a functional substitute .

Markets Remain Volatile Despite Record Release

Following the initial IEA announcement, U.S. crude oil prices briefly fell to lows of the day on news of the potential for fresh supply. But they quickly climbed higher, and once again had surpassed $90 per barrel by late Wednesday . International benchmark Brent crude oil has surged more than 25 percent since the US and Israel launched the war on February 28. Earlier this week, Brent was trading at $119 a barrel, the first time oil was trading at more than $100 a barrel since 2022 .

Since the war began, U.S. crude oil prices are up more than 30%. Retail gas prices have risen more than 50 cents to a national average of around $3.57 per gallon . "The proposed release is roughly equal to about four days of global production and 16 days of the volume of crude that transits through the Gulf," Macquarie analysts estimated. "If that doesn't sound like much, it isn't," the analysts said .

Energy experts warn that "closure of the Strait of Hormuz would disrupt roughly a fifth of globally traded oil overnight – and prices wouldn't just spike, they would gap violently upward on fear alone." If crude oil prices were to rise to $100 per barrel and remain at those levels for a while, that could add 0.6-0.7 percent to global inflation .

Long-Term Solutions Remain Elusive

"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," IEA Executive Director Fatih Birol said . While International Energy Agency (IEA) emergency reserves could partially offset short-term shortages, their capacity is inherently temporary. Maximum coordinated drawdowns could sustain approximately 24 million barrels per day for several