The International Energy Agency has proposed the largest coordinated release of emergency oil reserves in its 52-year history, a move designed to stabilize global energy markets roiled by the ongoing military conflict between the United States, Israel, and Iran. The proposal, first reported by The Wall Street Journal on Tuesday, calls for member nations to collectively release between 300 million and 400 million barrels of crude from strategic stockpiles.
If approved, the intervention would dwarf the 182 million barrels that IEA member countries released across two rounds in 2022 following Russia’s invasion of Ukraine. That release, the previous record, represented the most significant coordinated drawdown since the agency was founded in 1974.
What Is Driving the Emergency Action
The crisis traces back to February 28, when a series of U.S. and Israeli precision strikes targeted Iranian nuclear and energy infrastructure, including the critical Shahran oil depot. Iran retaliated by targeting regional energy hubs and, most consequentially, deploying naval forces to effectively shut down the Strait of Hormuz, a narrow waterway through which roughly 20 million barrels of oil, or about 20% of global daily consumption, flows each day.
Energy consultancy Wood Mackenzie estimates the disruptions have cut Gulf oil and products supply by approximately 15 million barrels per day. Brent crude surged past $119 per barrel on Monday before pulling back sharply to around $87.80 after news of the proposed reserve release broke. West Texas Intermediate settled at $83.45, down nearly 12% on the day.
G7 Leaders Weighing a Coordinated Response
G7 finance ministers convened an emergency virtual session to discuss the proposal on Tuesday, with French President Emmanuel Macron scheduled to host a follow-up video call with G7 leaders on Wednesday. The United States has pushed for a release at the upper end of the range, arguing that an intervention of 300 million to 400 million barrels, representing 25% to 30% of the 1.2 billion barrels held in combined IEA reserves, would send a strong signal to markets.
No final decision has been reached. IEA member countries are still assessing supply conditions and the projected duration of the Strait of Hormuz disruption before committing to a formal drawdown. The Pentagon has also taken military action to clear the shipping lane, eliminating 16 Iranian mine-laying vessels near the strait earlier this week.
How Much Relief Would It Actually Bring
Analysts are cautious about overstating the near-term impact. A 2022 analysis by the U.S. Treasury Department found that the previous round of coordinated reserve releases reduced gasoline prices by 17 to 42 cents per gallon. With the national average already at $3.54 per gallon as of March 11, up 48 cents from just one week ago, even a successful release may not fully offset the recent spike.
Morgan Stanley noted in a client report that even a swift resolution to the conflict implies weeks of continued disruption for energy markets. Crude is expected to remain volatile, trading in a wide band between $75 and $105 per barrel as the situation develops.
What This Means for Business Owners
For entrepreneurs and small business owners, rising energy costs ripple through virtually every operating expense. Fuel surcharges, shipping rates, and raw material costs all climb when oil prices spike. The ongoing tariff disputes have already stretched supply chain budgets, and sustained oil volatility compounds that pressure.
The IEA’s proposal represents the most aggressive attempt yet by Western governments to contain the economic fallout from the Iran conflict. Whether it proves sufficient depends largely on how quickly the Strait of Hormuz can be reopened and how long broader market uncertainty persists. A final decision from IEA members is expected within days.
