IEA/OECD May Release Additional Strategic Oil Stocks

Overview

The International Energy Agency (IEA) and OECD members are assessing whether to release additional strategic oil stocks as disruptions to shipping through the Strait of Hormuz or regional energy infrastructure persist. Citi analysts indicate that Europe could play a significant role by September, primarily supplying refined diesel, a departure from the current IEA‑led release that has largely drawn on supplies from the United States and Japan.

Current IEA Programme

The IEA‑coordinated programme, announced in March, targets the release of 400 million barrels of crude oil and refined products and is approaching its conclusion, expected within the next one to two months. The original plan called for 280 million barrels to be drawn from public (government‑controlled) reserves and 119 million barrels from industry‑held inventories. At the programme’s inception, IEA members collectively held about 1.8 billion barrels of strategic inventories, comprising 1.2 billion barrels under government control and 600 million barrels held by companies subject to government obligations.

Drawdown to Date

Government‑controlled inventories have experienced a physical draw of roughly 170 million barrels by July. Daily release rates have averaged about 1.1 million barrels, with a peak of over 2.7 million barrels per day recorded in April.

Market Impact

Oil product prices have risen sharply following the collapse of the Iran‑U.S. memorandum of understanding and renewed military confrontation over the past two weeks. Prices are now only 10‑15% below their late‑March 2026 highs.

Potential Second Intervention

A second coordinated release is not guaranteed. European governments may instead choose to preserve remaining emergency inventories, subsidise fuel prices, or allow higher energy costs as a lever to pressure Washington into resuming negotiations with Iran.

Outlook

The condition of Hormuz shipping routes and regional energy facilities will be the decisive factor in determining whether consuming nations need to draw further on emergency reserves.