Concerns persist that the release of strategic reserves will be insufficient to offset supply disruptions in the Middle East. International oil prices experienced historic volatility this week as market assessments of future crude supply shifted dramatically. According to Dow Jones Market Data, both WTI and Brent crude prices surged to nearly $120 per barrel during Monday's trading session before retreating. On Tuesday, both benchmarks recorded their largest single-day percentage declines since March 9, 2022. The market witnessed intraday swings exceeding 6% again on Wednesday, as investors grappled with conflicting supply concerns. The International Energy Agency (IEA) decided on Wednesday to release 400 million barrels of emergency petroleum reserves from member countries. This followed a meeting of G7 ministers on Monday to discuss a coordinated supply release through the IEA framework. While market panic has somewhat eased, analysts note persistent worries that the strategic crude releases will fall short of compensating for Middle Eastern supply gaps.

The impact of the reserve release appears limited. Rebecca Babin, Senior Energy Trader and Managing Director at CIBC Private Wealth, explained that the oil price pullback coincides with inherent limitations in the emergency reserve agreement, as crude won't immediately reach markets. "The processes of auctioning, loading, and integrating the oil into the system all require time," she stated. Babin highlighted practical constraints on the release rate of reserve原油. During the largest coordinated release following the 2022 Russia-Ukraine conflict, the maximum practical release rate was approximately 1.2 million barrels per day, which she suggested might represent the upper limit of market expectations. In contrast, current supply disruptions in the Middle East are significantly larger, estimated by her at around 16 million barrels per day—roughly equivalent to the volume typically transported through the Strait of Hormuz, one of the world's most critical oil shipping chokepoints. "While some shipping continues, other vessels are being rerouted, primarily via Saudi Arabia's East-West pipeline, with smaller volumes traveling through the UAE to Fujairah. But estimates I've seen indicate about 10 million barrels per day are currently affected or unable to transit efficiently."

JPMorgan estimates that a coordinated G7 release of 1.2 million barrels per day is feasible. While "helpful," this volume cannot substantially alleviate a 16 million barrel per day supply shortfall, providing only initial relief while pre-escalation tankers continue arriving. Once these vessels clear customs and new loadings cannot depart, the 1.2 million barrel daily release will be inadequate to address potential supply losses—the bank projects the deficit could reach 12 million barrels per day within two weeks. Data from AAA and price-tracking platform GasBuddy shows the U.S. national average gasoline price surpassed $3.50 per gallon this week, reaching its highest level since May 2024, driven by supply fears stemming from the Iran conflict. The 20% price increase over just 11 days matches the surge seen during the equivalent period after the Russia-Ukraine conflict began four years ago. The U.S. administration is reportedly considering multiple options, including releasing emergency reserves, suspending the federal gasoline tax, and potential U.S. Treasury intervention in oil futures markets. Following the 2022 conflict, the U.S. released 180 million barrels from the Strategic Petroleum Reserve, depleting inventories. Current U.S. strategic reserves stand at approximately 416 million barrels, significantly below the full capacity of 727 million barrels, according to Department of Energy data. Babin noted that releases from the U.S. Strategic Petroleum Reserve typically provide only short-term effectiveness with limited long-term impact. During the spring of 2022, the administration ordered a historic release of 180 million barrels to ease prices; by July that year, the Treasury Department stated analysis showed the coordinated U.S. and IEA release reduced gasoline prices by 17 to 42 cents per gallon.

Stability in the Strait of Hormuz remains critical. After a brief dip following the IEA announcement, oil prices surged again, with WTI crude reclaiming levels above $87 per barrel, up nearly 6% at the time of writing. Market attention has refocused on the security of the Strait of Hormuz. Jim Reid, Global Head of Macroeconomic Research and Thematic Strategy at Deutsche Bank, wrote in a report that investors will be "closely monitoring" whether exports via the Strait of Hormuz can resume from their current largely suspended state, particularly after Saudi Arabia, alongside the UAE and Kuwait, announced production cuts on Monday. A monthly report from the U.S. Energy Information Administration (EIA) released Tuesday stated that its assumption of a practical closure of the Strait of Hormuz would lead to further declines in Middle Eastern oil production in coming weeks. The report forecasts Brent crude prices remaining above $95 per barrel for the next two months, falling below $80 in the third quarter, and declining to around $70 by year-end, though this depends on conflict duration and resulting production disruptions. The EIA raised its 2026 average Brent price forecast to $78.84, a nearly 37% increase from its February projection. Goldman Sachs Group anticipates that if Persian Gulf oil exports decrease by 15 million barrels per day for 60 days, oil prices would stabilize between $89 and $93 per barrel. "The Iran conflict continues to evolve with no clear end in sight," said Kenny Zhu, an analyst at commodities research firm Global X, in an emailed commentary. "While we cannot predict when transit disruptions through the Strait of Hormuz will end or how the conflict will resolve, the situation has already heightened volatility in energy markets and forced global oil and gas tankers to reroute." Analysts widely agree that the optimal solution for stabilizing oil prices ultimately lies in restoring safe and reliable tanker passage through the Strait of Hormuz. Simon Flowers, Chairman and Chief Analyst at Wood Mackenzie, indicated that once the conflict concludes, "restarting the supply chain won't happen quickly." While refined products stored at refineries or ports could be loaded and shipped relatively fast, restoring wells to full production after extended shutdowns could take weeks or longer.