Tapping Reserves

A Record Release of Reserve Oil

The International Energy Agency members have agreed to release 400 million barrels of oil from their strategic reserves. This is the largest-ever move in history —  but only a temporary relief, and the pace of the release matters. The disruption from the Iran war is causing about a 20-million-barrel hole in global supply every day.

The 32 IEA member countries currently hold 1.2 billion barrels of public stocks and another 600 million in industry stocks, a safety net for the global energy markets.

The International Energy Agency head, Fatih Birol, called the disruptions in the oil market “unprecedented in scale.” The Strait of Hormuz, a critical shipping chokepoint, remains blocked by Iran, with mines now laid on the route and ships hit by projectiles.

The World’s Oil Shock Absorber

Emergency oil reserves were created in 1974 after the Arab oil embargo, when oil shortages paralyzed economies and triggered a 400% spike in oil prices.

The IEA was set up to ensure member countries keep enough crude in storage for any future oil shocks. Each member is required to hold at least 90 days of net imports.

These are stored in underground caverns, coastal tanks, or industry‑held stocks. They come in handy when wars, natural disasters, refinery outages, or shipping disruptions threaten supply. Emergency stocks are a buffer that buys time, but they cannot replace production in the long term.

When Governments Turn on Taps

Releases are meant to calm markets, not flood them. Governments can sell crude directly, lend it to refiners, or coordinate joint action through the IEA.

• 1991 – Gulf War: Members released stocks during Operation Desert Storm to stabilise supply as the conflict disrupted Middle Eastern exports.
• 2005 – Hurricane Katrina: A coordinated release supported the US after storm damage shut down Gulf Coast production and refineries.
• 2011 – Libya conflict: IEA members released 60 million barrels to offset the sudden loss of Libyan crude.
• 2022 – Russia’s invasion of Ukraine: The largest coordinated release in history, over 180 million barrels, to counter the price surge and supply shock.

National‑only releases: Countries like the US have also tapped reserves independently during refinery outages or domestic supply disruptions.

The Biggest Stockpiles

Emergency systems vary based on import needs and location.

• United States: The Strategic Petroleum Reserve is stored in Texas and Louisiana salt caverns. Around 400M barrels of crude.
• Japan: One of the world’s biggest stockpiles at 260M barrels. More than 90% of Japan’s oil imports come from the Middle East.
• Europe: Mix of government and industry‑held stocks to meet the 90‑day rule. Germany has 180M barrels of crude and finished oil products, France about 120M.
• China: Not a full IEA member but holds huge reserves, estimated at around 1.2B barrels, enough for 3-4 months.
• India: Also not a full member and has said it does not want to tap into its supply in the Iran crisis. Has about 250M barrels.