Plans for the largest emergency oil release in history suggest that energy markets are preparing for a prolonged conflict in the Middle East. The International Energy Agency (IEA) announced that its 32 member countries will release 400 million barrels of crude oil from strategic reserves, the biggest coordinated drawdown since the agency was created in 1974. The United States will separately release 172 million barrels from its Strategic Petroleum Reserve.
Despite the announcement, global oil prices continued to rise, reflecting concerns that the emergency supply may not fully offset disruptions caused by the ongoing conflict.
Brent crude climbed to around $100 per barrel, while West Texas Intermediate (WTI) rose nearly 9% to about $95 per barrel.
Analysts say the scale of the emergency release indicates that governments expect the crisis to continue for an extended period.
“The degree to which the IEA acted is being interpreted by some in the oil market as a signal that the conflict could continue for many weeks,” said Andy Lipow, president of Lipow Oil Associates.
The conflict has severely disrupted shipping through the Strait of Hormuz, one of the world’s most important energy corridors.
About 20 million barrels of crude oil and petroleum products pass through the strait each day, accounting for roughly 20% of global oil consumption.
Energy analysts warn that even a large release from global reserves may cover only a portion of the supply shortfall if the conflict continues.
Bob McNally, president of Rapidan Energy Group, said that current reserve releases could offset only a fraction of the estimated 15 million barrels per day supply disruption caused by reduced tanker traffic through the Strait of Hormuz.
Experts say oil prices could continue rising until either a ceasefire is reached or shipping routes in the region return to normal.
Some analysts believe the crisis could last much longer than markets currently expect.
Vivek Dhar, director of mining and energy commodities research at Commonwealth Bank of Australia, said the conflict may last months rather than weeks, increasing the risk of a major global energy shock.
If shortages become severe, analysts warn that oil prices could surge significantly higher to reduce global demand.
In extreme scenarios, Brent crude prices could climb to between $120 and $150 per barrel, particularly if developing economies are forced to reduce energy consumption due to supply shortages.
For now, energy markets remain highly sensitive to developments in the Middle East as governments and traders closely monitor the risk of further disruptions to global oil supplies.
