Last week, member nations of the International Energy Agency, including the United States, agreed to release 400 million barrels of oil from their strategic reserves. However, global oil prices have continued to hold at high levels.
The reason lies in Tehran's near-blockade of the Strait of Hormuz, which has disrupted the daily supply of approximately 15 million barrels of crude oil and 5 million barrels of petroleum products to the global market. In other words, the 400 million barrels of crude oil would be absorbed by the market in just 26 days.
The International Energy Agency stated in a declaration on Sunday, "The conflict in the Middle East is causing the largest supply disruption in the history of the global oil market."
The agency added, "This emergency coordinated action is the largest of its kind to date, providing a significant and timely buffer for the market. However, the most critical factor for ensuring the restoration of stable shipping flows is the resumption of regular traffic through the Strait of Hormuz."
The International Energy Agency noted that petroleum reserves from Asia and Oceania will be released immediately, while reserves from the Americas and Europe will not be deployed until the end of March.
The agency stated that the oil reserves can be introduced to the market through various methods, including tenders, loan agreements, or direct sales to refineries.
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