IEA agrees to release 400 million barrels of strategic petroleum reserves, the largest scale in history.

The International Energy Agency (IEA) has agreed to release 400 million barrels of oil from emergency oil reserves, the largest release in the agency's history, in an effort by various governments to curb the surge in energy prices sparked by the Middle East conflict. IEA Executive Director Fatih Birol said in a statement on Wednesday, "We face an unprecedented challenge in the oil market. IEA member countries have taken unprecedented emergency collective action to address it." Birol said the decision was unanimous and the specific implementation timing will be determined later. Earlier this week, the price of crude oil in London soared to nearly $120 per barrel due to a basic halt in oil transport through the critical Strait of Hormuz in the Persian Gulf, although futures prices have since fallen partly on market expectations that governments will use their oil reserves. The IEA is responsible for coordinating the release of oil reserves among the member countries of the Organisation for Economic Co-operation and Development (OECD). The organisation said that the 32 member countries of the OECD have over 1.2 billion barrels of public emergency reserves, including the largest US strategic petroleum reserve. In addition, there are 600 million barrels of industry reserves held by governments. German Minister of Economics Katharina Reiche had confirmed earlier reports about the 400 million barrels release and stated that Germany would participate in the action. She also said that the US and Japan will be the biggest contributors to this IEA release plan. A European Union diplomat said before the IEA announcement, "The main pressure driving this release action comes from the US government." US Secretary of the Interior Doug Burgum also welcomed the plan to release strategic reserves. In an interview, he said, "Now is the right time to consider releasing some reserves to ease global oil price pressure." However, Burgum also said he does not believe that the world is facing an energy shortage. He said, "The current issue is a temporary transportation blockade. We are addressing this temporary transport problem through military and diplomatic means, and we can solve it." Analysts point out that the speed at which the reserves are released daily may be as important, or even more critical, as the total amount released. Releasing 100 million barrels per month in the future would result in a daily release rate of around 3.3 million barrels per day, which is limited compared to the current approximately 20 million barrels per day of disrupted supply. The global oil transport is severely affected as the Strait of Hormuz between Iran and Oman is almost sealed off. Despite the IEA's plan to release reserves, oil prices rebounded on Wednesday, with doubts in the market about whether the plan is sufficient to counteract the supply impact that conflict may bring. The Iranian military said on Wednesday that the world should be prepared for oil prices to reach $200 per barrel, while three more ships were attacked in the blocked Persian Gulf.