Historic oil‑release plans signal Middle East war could drag on for months
In an aerial view, Marathon Petroleum Corp’s Los Angeles Refinery, one of North America’s largest oil refineries, operates as gas prices soar due to worldwide oil supply disruptions caused by the United States and Israel attacking Iran on March 10, 2026 in Carson, California.
David McNew | Getty Images
Plans to release the largest emergency oil stockpile in history send a clear signal: Energy markets are bracing for a conflict in the Middle East that could last much longer than initially expected.
The International Energy Agency said Wednesday that its 32 member countries will extract 400 million barrels of crude oil from strategic reserves; This is the largest coordinated decline since the agency was founded in 1974 in the wake of the oil crisis the previous year. The United States also announced it would obtain 172 million barrels from the Strategic Petroleum Reserve as part of a coordinated effort.
However, crude oil prices continued to climb even after the announcement; This highlighted traders’ doubts that the measures could quickly offset the major supply shock caused by the war and shipping disruptions in the Strait of Hormuz.
Oil prices increased by more than 8 percent with global indicator Brent Crude oil hit $100 per barrel West Texas Intermediate It rose 8.8% to $95 per barrel.
Oil prices since the beginning of the year
“The degree to which the IEA has taken action is being interpreted by some in the oil market as meaning that the conflict could continue for weeks,” said Andy Lipow, president of Lipow Oil Associates.
Lipow also noted that the conflict has effectively halted a significant portion of global energy flows.
Approximately 20 million barrels Crude oil and petroleum products pass through the Strait of Hormuz every day, accounting for roughly 20% of global oil consumption.
Despite the huge emergency release, strategic reserves can cover only a small part of the loss of supply if the conflict drags on for a long time, analysts said.
“Traders are now doing the math and realizing that the IEA’s cuts will at best offset only a small portion of the roughly 15 million barrels per day of net crude and refined product supply losses due to the ongoing halt of most tanker transits in the Strait of Hormuz,” said Rapidan Energy Group President Bob McNally.
Oil prices will continue to rise until a ceasefire is reached or a military deterioration in Iran’s offensive capabilities occurs, allowing tanker traffic to resume, he said.
Our expectation that this crisis will last for months rather than weeks likely means that markets are underestimating the disruption in global energy markets.
MST Marquee’s Saul Kavonic said the scale of the announcement revealed how seriously policymakers were taking the risk of oil shortages.
“The IEA’s decision also highlights how serious the risk of oil shortages is and shows that the IEA does not believe the war is continuing.” [likely] It will be over soon.”
Kavonic added that the move could also point to higher oil prices even after the conflict subsides, as these reserves will eventually need to be replenished.
Some also believe that markets are still underestimating the potential scale and duration of the crisis, even after recent price increases.
“Our expectation that this crisis will last for months rather than weeks likely means markets are underestimating the disruption in global energy markets,” said Vivek Dhar, director of mining and energy commodities research at the Commonwealth Bank of Australia.
If physical shortages occur, prices may have to rise sharply to curb demand, especially in developing economies, Dhar said.
He said, “If physical deficits are realized, Brent oil may rise to 120 to 150 dollars per barrel, forcing developing economies to demand destruction,” and added that prices may increase further if developed economies determine the price of demand destruction.
