The International Energy Agency’s decision to release 400 million barrels of emergency oil stocks, the largest reserves drawdown in its history, is likely to provide only limited relief if the Strait of Hormuz remains closed, according to an analysis by S&P Global Energy, as global markets continue to reel from the supply shock triggered by the ongoing West Asia conflict.The IEA this week announced the largest-ever emergency oil stock release in its history, making 400 million barrels available to global markets in a bid to ease disruptions caused by the war-driven energy crisis.
Relief for markets, but not a full fix
S&P Global Energy said the release would help the oil market adjust to the current imbalance, but warned that it would not be enough to solve the deeper disruption caused by the closure of the Strait of Hormuz, especially for Asian markets, where inventories are already tightening.As per news agency ANI, S&P said it remains unclear how effectively the released oil will reach the regions that need it most, particularly in Asia.The scale of the shortfall is already severe. It would take months for the 400 million barrels to offset the roughly 430 million-barrel reduction in global supply recorded in March alone.
Hormuz closure remains the core problem
According to Jim Burkhard, vice president and global head of crude oil research at S&P Global Energy, the real issue is not simply a shortage of oil in the world, but the inability to move enough of it through the region’s most critical shipping route.“There is too much oil that cannot be exported via the Strait of Hormuz and not enough in Asia, where stocks are running down. The market is seriously unbalanced and that will continue until the Strait is reopened and upstream and downstream operations return to normal. It will not happen quickly,” Burkhard said, as quoted by ANI.S&P Global Energy described the disruption in the Strait of Hormuz as the largest oil supply disruption in history.The agency estimates that only 3 to 4 million barrels per day of oil were exported during the first 11 days of March through routes bypassing the Strait of Hormuz. Before the war, around 21 million barrels per day of oil exports transited through the waterway.
Brent outlook revised, but volatility risk remains
Against this backdrop, S&P Global Energy has revised its base-case outlook for Dated Brent crude to a monthly average range of $70-100 for the remainder of 2026.However, that projection assumes that secure tanker flows through Hormuz resume in the coming weeks. S&P warned that if the closure stretches into months rather than weeks, crude oil prices could surge to new record highs.That warning underlines how heavily global oil markets remain tied to the reopening of the strategic chokepoint.
IEA’s biggest-ever stock release
The Paris-based IEA agreed on Wednesday to make 400 million barrels available from members’ strategic reserves, far above the 182.7 million barrels released in 2022 after Russia’s invasion of Ukraine.IEA member nations currently hold over 1.2 billion barrels of public emergency oil stocks, in addition to around 600 million barrels of industry stocks maintained under government obligation.The decision came after Iran’s retaliatory actions in the Gulf effectively halted cargo movement through the Strait of Hormuz, which normally handles about one-fifth of global oil shipments.
Countries begin releasing strategic reserves
Germany and Austria have confirmed they will release parts of their strategic reserves in line with the IEA’s call, while Japan said it would begin drawing down some stocks from Monday.Germany’s economy minister Katherina Reiche said the first deliveries could begin within days, while Austria’s economy minister Wolfgang Hattmannsdorfer said Vienna would also extend its national strategic gas stockpile.The G7 energy ministers had also backed the use of strategic reserves in principle.While the IEA’s record reserves release may help cushion the immediate blow, S&P’s assessment suggests the global oil market will remain under extreme strain unless the Strait of Hormuz reopens and normal energy flows resume.
