By Rebecca Feng and Joe Wallace

After the 1973 oil shock, the U.S. and allies swore to maintain emergency stockpiles to make sure there could never be a repeat.

The blockage in the Persian Gulf poses the sternest test the reserves have ever faced.

Finance ministers from Group of Seven economies met Monday to discuss whether to release crude to counteract the loss of Middle Eastern supplies.

"We are prepared to take all necessary measures, including drawing on strategic stock reserves, in order to stabilize the market," French Finance Minister Roland Lescure told reporters after the meeting of International Energy Agency, an organization of Western and allied economies that helps oversee the oil stockpiles of 32 member countries.

Lescure added there were currently no supply issues on the global market.

The meeting showed growing concern in the Trump administration and allied governments about the fast-spreading effects of the Iran war on energy markets. The Strait of Hormuz, the exit point for ships in the Persian Gulf, is effectively closed, trapping more than 1,000 ships and forcing major Gulf oil producers to cut output.

Benchmark Brent crude futures, having rocketed at the open late Sunday, pared gains as news emerged of a possible reserve release. Still, prices are almost 40% higher than on the eve of the war and traded above $100 a barrel for the first time since 2022.

Traders worry that even if the waterway reopens, exports of crude, diesel and gasoline won't quickly recover to prewar levels in part because of attacks on energy infrastructure. Restarting shut wells also takes weeks or even months. Some wells never return to their original production levels.

The Gulf exported around 20 million barrels of crude and refined fuels a day before the war, roughly a fifth of what the world consumes. Of that, roughly 5.5 million barrels a day can continue to flow via pipelines that avoid the Strait of Hormuz, according to the IEA. That leaves 14.5 million barrels of exports a day to be replaced.

IEA members hold 1.2 billion barrels in public stocks, plus another 600 million in mandatory commercial inventories, Birol said on Monday. By rough calculation, that is around 124 days worth of lost supply from the Gulf.

A lot of that missing oil flow would normally go to China, which maintains its own reserves, the size of which aren't officially disclosed. But analysts estimate them to be around 1.5 billion barrels.

The IEA was formed after the Arab oil embargoes shook the world economy, an oil consumers' counterpoint to the Organization of the Petroleum Exporting Countries. The agency's members include the U.S., Japan, South Korea and oil-importing nations in Europe. They are required to stockpile enough petroleum to cover 90 days of net imports.

Previous releases from strategic reserves have had mixed results.

"It helps mitigate the problem, but if the interruption continues, you're never going to be able to sort out all the implications of a large drop in flows with a release of inventory," said Paul Horsnell, an independent energy analyst in London.

The U.S., thanks to the shale revolution, has flipped from a net importer to a net exporter, but still stores 415 million barrels in Louisiana and Texas salt caverns.

A problem is barrels sold from stockpiles need to be replenished, which adds to future demand. And as reserves get taken down, markets start to get worried about whether there will be enough supply to replace them.

Also a challenge: what's in the reserves isn't the same as what is stuck in the gulf, including a large amount of refined products like gasoline and jet fuel.

"SPR releases go the smoothest when you can release something very close to what's been lost," said Andrew Harbourne, analyst at Wood Mackenzie.

Wars have spurred four of the previous five coordinated releases.

Twice in quick succession after Russia invaded Ukraine in early 2022, IEA members teamed up to tap their stockpiles.

At first, the move had the opposite of its intended effect. Traders saw the release as a sign that the oil crisis was worse than they thought, and prices rose about 20% the week after the announcement.

Analysts say the releases eventually helped bring prices down. Some Republicans said the move aimed to win over voters before midterm elections at the expense of national security.

A particularly successful release took place in 1991. Then-President George H.W. Bush prepared for Operation Desert Storm by ordering what was then the first ever drawdown of the SPR the same night the U.S. attacked Iraq. IEA members joined along, triggering a plan they had put in place ahead of the invasion.

The planning had an effect: Prices fell more than 20% on the first day of the U.S.-led assault. By the time coalition forces entered Iraq and Kuwait in February, oil from the SPR was on the market.

Most of the previous releases by the IEA were "targeted at quelling any perception of risks to supplies, rather than responding to actual shortages or a realistic immediate risk of shortages," said Chris Wheaton, an oil and gas analyst at Stifel. "There is still plenty of oil. The key is opening the Strait of Hormuz," he said.

The U.S. reserve is still running below levels from before the start of the Ukraine war. In his inaugural address, Trump pledged to fill it up. But by the end of February, there were 415 million barrels in the SPR, 30% below levels from early 2022.

The U.S. reserve is under governmental control. Some European countries instruct energy companies to hold a certain amount of petroleum in reserve, and simply reduce that target in a "release."

Japan, which is heavily reliant on Middle East oil, has more than 200 days of net imports in storage, a mix of publicly held and commercial stocks. South Korea has a similar buffer.

One complicating factor is the U.S. administration's sometimes contentious relationship with the IEA. Secretary of Energy Chris Wright threatened to pull out of the agency earlier this year over the IEA's advocacy for renewable energy.

Write to Rebecca Feng at rebecca.feng@wsj.com and Joe Wallace at joe.wallace@wsj.com

(END) Dow Jones Newswires

March 09, 2026 13:41 ET (17:41 GMT)

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