Strategic oil release may calm the market but cannot fix the Hormuz disruption. conflict news
Hundreds of tankers sit idle on both sides of the Strait of Hormuz as Iran effectively closed the waterway, sending oil prices above $100 — the highest since 2022 after the start of the Russia-Ukraine war.
Oil tanker traffic in the strait, through which a fifth of global oil passes, has collapsed after Israel and the United States launched attacks on Tehran on February 28. Asian countries, including India, China and Japan, as well as some European countries, obtain the bulk of their energy needs from the Gulf. The global economy will collapse due to supply disruptions.
To avoid shock, the International Energy Agency (IEA) has decided to release 400 million barrels of oil from emergency reserves, the largest coordinated drawdown in the agency’s history. But it has failed to push down prices.
The agency had released about 182 million barrels of oil to stabilise oil prices after Russia’s invasion of Ukraine.
According to the agency, oil shipments through the strategic waterway have fallen to less than 10 per cent of pre-war levels, threatening one of the most vital arteries in the global energy system.
IEA members collectively have about 1.25 billion barrels in government-controlled emergency reserves, as well as about 600 million barrels in industry stocks linked to government obligations.
Big numbers in a big market
This figure may appear huge, but it is shrinking rapidly compared to the scale of global energy demand.
“It feels like a small bandage on a big wound,” said energy strategist Naif Aldandeni, describing the world’s largest coordinated emergency oil release as governments scramble to stabilise markets shaken by the war.
The US Energy Information Administration (EIA) estimates that world consumption of petroleum and other liquids will average 105.17 million barrels per day in 2026. At that rate, 400 million barrels would theoretically cover only four days of global consumption.
Even when compared to normal traffic through the Strait of Hormuz—about 20 million barrels per day— the oil released is only equivalent to 20 days of normal flow.
Eldandeni told Al Jazeera that emergency reserves could calm jitters in markets but could not replace the lost function of disrupted shipping corridors.
“The release may provide temporary relief and alleviate concerns,” he stated, “but its effectiveness will be limited as long as the underlying issue – the freedom of supply and tanker movement through the Strait of Hormuz – remains unresolved.”
Oil prices reflect those concerns. Brent crude traded at $103.14 per barrel on Friday, after rising to around $120 earlier, due to fears of production and shipping disruptions.
geopolitical risk premium
Oil expert Nabil al-Marsoumi stated that supply fundamentals alone could not explain the price rise.
“The closure of the Strait of Hormuz resulted in the geopolitical risk premium rising to almost $40 a barrel relative to market fundamentals,” he told Al Jazeera.
From that perspective, issuing strategic reserves serves primarily as a temporary tool to reduce that premium rather than fundamentally rebalancing the market.
Prices above $100 a barrel are uncomfortable for major consumer economies that are already struggling to curb inflation and protect economic growth.
Recent EIA estimates show that global demand has not yet declined significantly due to the war, remaining around 105 million barrels per day. Therefore, market pressure stems less from declining consumption and more from fears of supply shortages and delays in deliveries to refineries and consumers.
Threat to oil infrastructure
The latest increase could deepen those fears.
United States President Donald Trump said on Friday that US Central Command (CENTCOM) “carried out one of the most powerful bombing strikes in the history of the Middle East and completely destroyed every military target in Iran’s crown jewel, Kharg Island”.
He said that “for reasons of decency” he “chose not to destroy the oil infrastructure on the island” but warned that Washington might reconsider that restraint if Iran continued to disrupt shipping through the Strait of Hormuz.
CENTCOM confirmed the operation, saying that US forces had “struck more than 90 Iranian military targets on Kharg Island, while preserving oil infrastructure”.
Meanwhile, Iranian officials have warned that if there is a direct attack on Iranian oil infrastructure, they will target US-linked energy facilities across the region.
Kharg Island is not just a military location. It serves as the primary export terminal for Iranian crude oil, making it a vital node in the country’s oil supply network.
If attacks move from disrupting shipping to targeting export infrastructure, the crisis could shift from a chokepoint disruption scenario to one linked to direct loss of production and export capacity.
In such circumstances, oil drawn from emergency reserves will only serve as a temporary bridge rather than a permanent solution to lost supplies.
Major oil companies such as QatarEnergy, the world’s largest producer of liquefied natural gas (LNG), Kuwait Petroleum Corporation and Bahrain state oil company Bapco have halted production and declared force majeure, while Saudi Aramco, the world’s largest oil producer and the state oil company of the United Arab Emirates, ADNOC, have closed their refineries.
emergency reserve limit
Even in a less severe scenario – where maritime disruption persists but infrastructure remains intact – the ability of strategic reserves to stabilise markets remains constrained by logistics.
The US Department of Energy stated that the US strategic petroleum reserves as of February 18, 2026, were 415.4 million barrels. Its maximum extraction capacity is 4.4 million barrels per day, and oil requires approximately 13 days to reach US markets after the President’s release order.
This means that even the world’s largest emergency reserve cannot immediately flood the market with crude oil. Releases must pass through pipelines, shipping networks and refining capacity before reaching consumers.
Eldandeni said the current intervention would likely produce only a temporary stabilisation effect, while Al-Marsoumi warned that a prolonged disruption in the Strait of Hormuz – or the spread of threats to other chokepoints such as the Bab el-Mandeb Strait in the Red Sea – could send prices rising sharply and further.
