IEA Plans to Release 400 Million Barrels of Strategic Oil Reserves to Address Strait of Hormuz Risks

To address the global crude oil supply risks resulting from potential disruptions to transportation through the Strait of Hormuz, the International Energy Agency (IEA) plans to coordinate the release of a total of 400 million barrels of strategic crude oil reserves by its member countries. This move aims to stabilize market sentiment and curb sharp short-term fluctuations in oil prices, rather than immediately alleviate supply shortages.

According to S&P Global data, crude oil and refined product exports from the Persian Gulf region have already decreased by approximately 17 million barrels per day due to restricted passage through the Strait. Although the reserve release can provide a buffer, the lag in physical transportation and refining processes means that actual supply recovery will still take several weeks. Logistical bottlenecks, ship rerouting delays, and refinery scheduling cycles collectively constitute the "time difference" in supply transmission.

Japan, as a major participating country, is adopting a "dual-track" approach to its reserve release: prioritizing the use of commercial inventories held by companies while simultaneously initiating auctions and targeted allocations of government reserves. This phased release mechanism helps to more accurately match the crude oil demand rhythm of domestic refineries, avoiding resource misallocation. However, from the issuance of authorization to the actual arrival of crude oil at refineries, it still takes time for loading and unloading arrangements, shipping schedules, and processing schedules, so the market benefits are gradual. Market analysis indicates that the IEA's reserve release serves more as a "ballast" – stabilizing buyer confidence and curbing panic buying that drives up oil price peaks when geopolitical risks are high. However, constrained by transportation efficiency and refining capacity, oil prices are unlikely to fall rapidly. In similar events, Brent and WTI crude oil prices may experience upward pressure in the short term, but due to the two-way effect of reserve releases and logistical constraints, they are not expected to reach new highs before the end of March. Overall, this action is a typical policy tool for dealing with sudden supply chain disruptions. Its core value lies in buying time for the market, waiting for geopolitical tensions to ease or alternative transportation channels to recover, rather than completely resolving structural shortages.