Report: IEA Proposes Largest Coordinated Oil Reserve Release in History
The International Energy Agency's member states are expected to vote on a record-setting drawdown of global oil reserves on Wednesday, according to the Wall Street Journal. The release would help offset the impact of the ongoing Strait of Hormuz closure, which has taken about 14 million barrels per day of net oil export capacity offline (excluding the six million bpd that Saudi Arabia has rerouted via the Red Sea).
The proposed release from member states' strategic reserves would exceed the 182 million barrel emergency authorization granted in 2022, which was intended to offset the effects of the invasion of Ukraine. The size of the proposal will likely be revealed once it is approved or disapproved.
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The IEA has 32 member states, any one of which could interfere with the formal proposal. Iran - which is driving oil prices higher in an attempt to weaken the Trump administration's negotiating position - is not a member of the IEA, nor are Russia or China, Iran's most powerful allies.
Member states can also make their own unilateral decisions on strategic petroleum releases. During 2021-22, in the midst of the COVID pandemic, the Biden administration authorized the release of up to 260 million barrels from U.S. reserves in an attempt to control prices.
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