The Strait of Hormuz is a critical oil transit chokepoint, and disruptions there significantly impact global oil supply. Currently, the global oil market is facing significant disruptions due to the war in the Middle East, with crude production curtailed by at least 8 million barrels per day (mb/d) and an additional 2 mb/d of condensates and natural gas liquids (NGLs) shut in. The conflict has led to a significant reduction in oil exports, with approximately 20 mb/d of crude and product exports currently disrupted.

IEA’s Emergency Measures

In response to the escalating situation, the International Energy Agency (IEA) member countries agreed on 11 March to release 400 million barrels of oil from their emergency reserves. This coordinated effort aims to mitigate the immediate impacts of the supply disruptions. The UK has notably contributed 13.5 million barrels to this stock release, with Ed Miliband stating, “With this action, the UK is playing our part in working with our international allies to address the disruption in oil markets.”

Current Oil Market Conditions

Despite these emergency measures, the IEA has indicated that the conflict in Iran is causing the largest supply disruption in the history of the global oil market. Oil prices have surged by $20 per barrel, reaching $92 per barrel since hostilities broke out on 28 February. Global observed inventories of crude and products are assessed at more than 8.2 billion barrels, the highest level since February 2021, but this may not be sufficient to offset the ongoing disruptions.

Impact on Gulf Countries

Gulf countries have also responded to the crisis by cutting total oil production by at least 10 million barrels a day. The flow of oil through the Strait of Hormuz has reduced to ‘a trickle,’ severely impacting energy production forecasts in the region. The conflict has already halted shipments through this vital waterway, which carries a fifth of the world’s oil supplies and seaborne gas.

Future Outlook and Uncertainties

While the coordinated emergency stock release provides a significant and welcome buffer, it remains a stop-gap measure in the absence of a swift resolution to the conflict. Observers are concerned about the duration of disruptions to shipping through the Strait of Hormuz, and the ultimate impact on oil and gas markets from the ongoing conflict remains uncertain. Details remain unconfirmed.

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Recent Developments

In a landmark decision, the IEA has agreed to release 400 million barrels of oil from its emergency reserves, marking the largest oil stock release in the agency’s history. This decision was made unanimously by the 32 member countries of the IEA and comes in response to significant supply disruptions caused by the ongoing conflict in Iran, which began on February 28, 2026.

Fatih Birol, the Executive Director of the IEA, stated, “The oil market challenges we are facing are unprecedented in scale, therefore I am very glad that IEA Member countries have responded with an emergency collective action of unprecedented size.” He emphasized the importance of energy security, noting, “Energy security is the founding mandate of the IEA, and I am pleased that IEA Members are showing strong solidarity in taking decisive action together.”

Impact on Oil Prices

Since the outbreak of the Iran war, oil prices have experienced significant volatility, with Brent crude peaking at $120 per barrel before settling at around $90 per barrel recently. The IEA members hold emergency stockpiles of over 1.2 billion barrels, which allows them to respond effectively to such crises.

Future Considerations

Despite the release of these reserves, Birol cautioned that the most crucial factor for restoring stable oil and gas flows is the resumption of transit through the Strait of Hormuz, a vital shipping lane where an average of 20 million barrels per day transited in 2025. He remarked, “But to be clear, the most important thing for a return to stable flows of oil and gas is the resumption of transit through the Strait of Hormuz.”

Angie Gildea, another key figure in the IEA, added, “There is simply no substitute for restoring access through the Strait of Hormuz.” As the situation continues to evolve, observers will be closely monitoring developments in the region and the potential impacts on global oil supply and prices.

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