The 32 governments that make up the International Energy Agency have voted unanimously to supply shaky oil markets with 400 million barrels of oil (bbl), roughly equivalent to 20%-30% of the emergency stockpiles of oil that the IEA membership collectively holds for near-term use.

In announcing the move, IEA director Fatih Birol called it the “largest ever release of emergency oil stocks in our agency’s history” and said the reason for the historic decision was “to offset the supply lost through the effective closure of the Strait [of Hormuz]”.

With the IEA estimating that the strait carries, on average, 15 million barrels of crude oil per day and another 5 million barrels of oil products, the closure of the strait, it said, removes some 25% of the world’s oil and related products traded by sea. The figure appears to be based on data compiled over the course of the full year in 2024.

IEA said its members hold emergency stockpiles of more than 1.2Bn barrels, with a further 600M barrels of industry stocks held by governments, under obligation to IEA reserves policy. The current, coordinated stock release is the sixth in the history of the IEA since its creation in 1974. Previous collective actions to inject emergency supplies into the market came from IEA in 1991, 2005, 2011, and twice in 2022.

UNCTAD report on disruption to fossil fuel volumes and ship transits through Hormuz

A United Nations report shows that even greater volumes of energy flows were passing through the narrow passageway of the strait that connects the Persian Gulf with the Arabian Sea, prior to the most recent, ongoing conflict in the region. 

In the week leading up to the 28 February attacks that Israel and the United States launched in Iran, 38% of the global trade in crude oil, 29% of liquefied petroleum gas and 19% of liquefied natural gas passed through the Strait of Hormuz, statistics compiled by the United Nations Commission on Trade and Development (UNCTAD) show.

UNCTAD’s figures, from Clarksons Research, also show that ship transits of the strait have fallen from an average of 129 per day between 1-27 February 2026, to between 3-6 per day from 3-7 March.

Oil markets have reacted quickly to the supply shock, UNCTAD said, noting significant price rises for both oil and gas as most ships remain locked in the Persian Gulf and reprisal attacks on vessels and oil infrastructure by Iran have continued to escalate.

WoodMackenzie analysis shows potential for US$150-US$200/bbl 

Energy price spikes in the oil and gas markets are underway and could intensify significantly if the US-Israeli war in Iran creates a scenario where “wells are shut-in for a prolonged period,” international energy market analysis consultants WoodMackenzie said.

“With 15 million barrels per day of Gulf supply suddenly offline, global oil demand will need to fall to rebalance the market—a process that could require prices to reach US$150/bbl,” a WoodMackenzie report said.

Crude prices reached US$100/bbl early in the second week of March 2026, with competition and “markets dependent on exports particularly exposed”.

Europe and Asia face the most significant pressure for energy supplies, according to WoodMackenzie, and the competition between the two continents is “intensifying price pressures across all regions”.

“In 2025, Gulf refineries supplied 60% of Europe’s jet fuel and 30% of its diesel, volumes which are now entirely cut off. Asia, which receives the majority of Gulf crude exports, faces equally severe pressure. Chinese, Indian, and other Asian buyers have been scrambling to secure alternative cargoes, driving up prices for West African and Latin American crude,” WoodMackenzie reported. The firm’s analysis said that oil prices could reach US$200/bbl in 2026 ’if the conflict prolongs’.

Reports: ’power price volatility’ due to gas disruption

The IEA’s evidence corroborated the market disruption outlined by WoodMackenzie, and the IEA director sounded a warning of limited replacements for gas volumes shut in by war in the Middle East.

“Middle East oil producers have started to reduce production, and we have seen further attacks and damage to energy and energy-related infrastructure. Refinery operations have also been disrupted, with major implications for jet fuel and diesel supplies. In particular, the situation in natural gas markets is also very challenging. There are few options to replace the missing LNG cargoes from Qatar and the Emirates,” Mr Birol said. 

In total, Mr Birol said that “global energy supply has been reduced by around 20%, and underlying market balances [for LNG] coming into this conflict were even tighter than in the case of oil,” he said, noting that Asia is the “most severely affected region for gas”. 

QatarEnergy’s force majeure threatens around 20% of global LNG supply and, according to WoodMackenzie, creates severe supply pressure for South Asian importers. India relies on Qatar for more than half of its LNG imports, while Pakistan sourced almost all of its 2025 LNG imports from Qatar. Bangladesh also depends heavily on Gulf suppliers, with Qatar and the UAE accounting for nearly three-quarters of its LNG imports last year.

In addition to Asia, Europe will face markedly higher prices as markets react to increased competition and significant shortages in the gas market.

WoodMackenzie’s analysis of gas markets showed that a loss of 1.5Mt of LNG per week, or 2.2Bn m3, equivalent to nearly 20% of global LNG exports leaves European markets facing electricity price spikes created by global spikes in gas prices, despite growing renewable resources.

“Europe added 306 TWh of low carbon power supply between 2022 and 2025, reducing fossil fuel dependence and resulting in the contribution of gas and coal falling by 292 TWh,” said Peter Osbaldstone, Research Director, Europe Power at Wood Mackenzie. “But gas generators still set marginal prices on a frequent basis in major markets. When TTF rises €30/MWh, German power prices follow with €40/MWh increases.”WoodMackenzie Research Director Peter Osbaldstone said. 

IEA director Birol was unequivocal in the need for a return to free passage for vessels through the Strait of Hormuz to restore balance to energy markets.

“This [release of oil reserves] is a major action aiming to alleviate the immediate impacts of the disruption in markets. 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,” Mr Birol said.