The International Energy Agency is proposing that its member governments jointly release up to 400 million barrels of oil from strategic stockpiles after the Iran war set off a chaotic spike in crude prices.
Why it matters: It would be the largest joint release in the history of IEA, which coordinates members’ emergency responses to oil shocks.
The effort is the most aggressive energy policy response yet to the conflict that’s bottling up massive volumes as transit through the Strait of Hormuz off Iran remains largely frozen.
“The conflict in the Middle East is having significant impacts on global oil and gas markets, with major implications for energy security, energy affordability and the global economy,” IEA executive director Fatih Birol said in a briefing from the agency’s Paris headquarters on Wednesday.
Driving the news: The narrow waterway off Iran is a critical trade artery that roughly a quarter of the world’s seaborne oil supply passes through, but is now too risky for nearly all journeys.
That de facto closure is also causing spillover effects, with some Gulf region countries dialing back oil production as storage space gets tight.
