Countries agree to record release of emergency oil reserves as prices surge

VIENNA, Austria 

Dozens of countries have agreed to release a record amount of oil from their emergency reserves to try to tackle supply shortages and soaring prices.

All 32 of the International Energy Agency's (IEA) members — including the UK, the US, and many of the world's richest nations — will release 400 million barrels to combat what the group said were challenges "unprecedented in scale".

The US-Israel war with Iran has caused oil exports through the Strait of Hormuz, which carries 25% of global oil supplies by sea, to virtually stop and production in the region to slump.

The oil price is nearly a quarter higher than when the war began and experts say the IEA's move would only be a short-term solution.

The release is more than double the previous record amount released by the IEA's members following Russia's full-scale invasion of Ukraine in early 2022.

However, it would only amount to around three or four days' worth of global supply or roughly a fortnight's worth of what would normally be shipped out of the Strait of Hormuz.

The IEA's member and associate countries represent two thirds of global energy production and 80% of consumption.

Member countries are required to keep 90 days' worth of their nation's oil use in reserve in case of global disruption.

Collectively, the members hold over 1.2 billion barrels in emergency stockpiles, with a further 600 million barrels of industry stocks held under government obligation.

Releasing a third of the stocks its governments hold is not something that it can repeat frequently.

The oil itself is not in a single place. For example, producers like Shell and BP keep stocks at terminals and refineries around the UK and can earmark stocks held elsewhere as counting towards their reserves.

When it is released, it does not mean a sudden flood of new oil starts moving.