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Dozens of countries agreed to release 400 million barrels of oil. But it didn't bring down prices.
Petroleum prices rose in spite of the announcement, signaling real concerns about a more protracted conflict.
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The International Energy Agency said Wednesday that member countries had unanimously agreed to release 400 million barrels of oil from their reserves in a bid to ease prices that are soaring due to the Iran war.
Following the IEA announcement, U.S. crude oil prices briefly fell to lows of the day, on news of the potential for fresh supply. But they quickly climbed higher, passing $88 per barrel around midday.
The market moves Wednesday are a sign of real concerns about a more protracted conflict, despite President Donald Trump‘s assurances this week that the U.S.-Israeli war in Iran would be over soon.
The agency did not set out a definitive timeline for when the release — the largest ever by IEA nations — would begin. "The IEA Secretariat will provide further details of how this collective action will be implemented in due course," a statement said.....
Overall, "policy measures may have limited impact on oil prices unless safe passage through the Strait of Hormuz is assured," the analysts said, given how much oil is currently blocked from the global market in the region.
Historically, they said, "emergency releases have peaked around 1.4 million barrels per day." They added that it could be helpful but "that pace would not materially ease a 16 million barrels per day shortfall and would likely provide only initial relief."
IEA countries have executed emergency releases before, notably an estimated 180 million barrels in 2022, after Russia invaded Ukraine.
Following the IEA announcement, U.S. crude oil prices briefly fell to lows of the day, on news of the potential for fresh supply. But they quickly climbed higher, passing $88 per barrel around midday.
The market moves Wednesday are a sign of real concerns about a more protracted conflict, despite President Donald Trump‘s assurances this week that the U.S.-Israeli war in Iran would be over soon.
The agency did not set out a definitive timeline for when the release — the largest ever by IEA nations — would begin. "The IEA Secretariat will provide further details of how this collective action will be implemented in due course," a statement said.....
Overall, "policy measures may have limited impact on oil prices unless safe passage through the Strait of Hormuz is assured," the analysts said, given how much oil is currently blocked from the global market in the region.
Historically, they said, "emergency releases have peaked around 1.4 million barrels per day." They added that it could be helpful but "that pace would not materially ease a 16 million barrels per day shortfall and would likely provide only initial relief."
IEA countries have executed emergency releases before, notably an estimated 180 million barrels in 2022, after Russia invaded Ukraine.
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