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In response to the ongoing conflict with Iran, the International Energy Agency (IEA) announced on Wednesday (March 11) that its member countries will release 400 million barrels of oil from their emergency reserves. This marks the largest release in history, aimed at alleviating the sharp increase in oil prices caused by disruptions in the Strait of Hormuz. The strait, a crucial passage for about one-fifth of the world's oil supply, has faced near-total closure due to threats and attacks on tankers by Iran.
The IEA's decision follows a similar release in 2022, when 182 million barrels were made available after Russia's invasion of Ukraine. According to The Wall Street Journal, the current release aims to counter the massive disruption caused by the conflict, which has significantly reduced global oil supply.
The IEA's 32 member countries unanimously agreed to the release, with Japan pledging to release 80 million barrels and Germany contributing 19.51 million barrels. This intervention is expected to deliver about 26 days' worth of crude, typically transported through the Strait of Hormuz, to the global market.
The conflict has led to attacks on at least 13 commercial vessels, exacerbating the situation. Iran's military actions, including laying mines in the strait, have further complicated the crisis. Despite these challenges, the IEA's executive director, Fatih Birol, emphasized the importance of global cooperation in addressing such disruptions.
The release of oil reserves comes amid volatile market conditions, with oil prices fluctuating significantly. Brent crude prices have reached $90 a barrel, following earlier spikes to nearly $120. The ongoing conflict and its impact on oil supply continue to pose significant challenges to the global economy.