Oil from the International Energy Agency or IEA emergency reserves will soon start flowing to global markets following the announcement on 11 March that IEA Member countries will make 400 million barrels of oil available to the market in response to the disruptions resulting from the Middle East conflict. Individual implementation plans have been submitted to the IEA by Member countries. These plans indicate that stocks will be made available by IEA Member countries in Asia Oceania immediately while stocks from IEA Member countries in the Americas and Europe will be made available starting from the end of March.
This is the sixth time that IEA Member Countries have taken emergency collective action to support oil markets in the history of the IEA, which was created in 1974. Previous collective actions were taken in 1991, 2005, 2011, and twice in 2022. IEA noted that the war in the Middle East is creating the largest supply disruption in the history of the global oil market. This emergency collective action, by far the largest ever, provides a significant and welcome buffer. But the most important factor in ensuring a return to stable flows is the resumption of regular transit of shipping through the Strait of Hormuz. Adequate insurance mechanisms and physical protection for shipping are key to the resumption of flows.
However, 400 million barrels of crude oil is equivalent to just around four days of total global consumption.