United States Releases 172 Million Barrels of Oil from Strategic Reserve
The United States has taken decisive action by releasing 172 million barrels of oil from its Strategic Petroleum Reserve (SPR). This step is part of a collective action by the International Energy Agency (IEA), which will collectively release 400 million barrels of oil to the global market to dampen price surges caused by Middle East conflict.
The US contribution accounts for nearly half of the total commitment from IEA member nations. The US Department of Energy confirmed that the distribution process will begin next week and is estimated to take approximately 120 days to complete.
This decision marks the largest market intervention since the IEA was established following the 1973 oil crisis. IEA Executive Director Fatih Birol stated that this step represents an emergency response unprecedented in the agency’s history.
“IEA member nations have unanimously decided to launch the largest emergency oil stock release in the history of our organisation,” Birol said. However, he emphasised that a permanent solution is not merely releasing reserves. “The most critical factor for restoring stable oil and gas flows is the resumption of transit through the Strait of Hormuz.”
The Strait of Hormuz, which transports 20% of the world’s oil supply, is currently completely shut down. Market volatility has increased sharply following the escalation of conflict between the United States-Israel and Iran, resulting in the closure of this vital passage.
Despite releasing a massive quantity, the US Department of Energy plans to replenish the reserve with 200 million barrels of oil over the next year. Interestingly, the authorities claim this refilling process will be conducted “at no cost to taxpayers,” although the mechanism details have not been disclosed to the public.
As of 6 March, the US SPR contained approximately 415 million barrels of its total 700 million barrel capacity.
Beyond the United States, other advanced economies such as Japan and Germany are also taking action. Japanese Prime Minister Sanae Takaichi confirmed she will release reserves beginning next Monday. Germany, meanwhile, plans to release 2.4 million tonnes of oil to maintain domestic stability.
However, some analysts remain cautious. Ipek Ozkardeskaya from Swissquote Bank described the 400 million barrels as merely a “temporary solution,” given that daily consumption by IEA nations reaches 45 million barrels. “The Middle East is currently producing 6% less oil due to the war,” she added.
The crisis has triggered panic across various nations. Bangladesh is deploying military forces to protect oil depots, whilst India and Greece have imposed strict price controls on energy to shield consumers from uncontrolled inflation.