As the war in the Middle East disrupts global oil and gas supplies leading to skyrocketing prices, the 32 Member countries of the International Energy Agency (IEA) unanimously agreed on March 11 to make 400 million barrels of oil from their emergency reserves available to the market.
“The oil market challenges we are facing are unprecedented in scale, therefore I am very glad that IEA Member countries have responded with an emergency collective action of unprecedented size,” IEA Executive Director Fatih Birol said. “Oil markets are global so the response to major disruptions needs to be global too. Energy security is the founding mandate of the IEA, and I am pleased that IEA Members are showing strong solidarity in taking decisive action together,” Birol added, after convening an extraordinary meeting of IEA Member governments on March 10 to assess market conditions and consider the available options to address supply disruptions in global oil markets stemming from the war in the Middle East, the IEA said in a press release.
Beyond the direct damage to energy infrastructure in the region, the crisis has led to a near halt in tanker movements through the Strait of Hormuz. With nearly 20 million barrels per day of crude and product exports currently disrupted and limited alternative options to bypass the world’s most critical oil transit chokepoint, producers and consumers globally are feeling the strain, the IEA said.
However, Saudi Arabia’s East-West pipeline connecting Abqaiq on the Kingdom’s eastern Gulf coast to the port of Yanbu on the Red Sea and the smaller UAE’s Abu Dhabi Crude Oil Pipeline (ADCOP), or the Habshan–Fujairah oil pipeline, are bypassing the Strait of Hormuz. The East-West pipeline is estimated to have a total design capacity of 7 million barrels per day while the Emirati pipeline has a reported total capacity of 1.8 million barrels per day.
Iran has reportedly attacked at least six ships in the Persian Gulf and the Strait of Hormuz as of March 12.
According to the IEA, the emergency stocks will be made available to the market over a timeframe that is appropriate to the national circumstances of each Member country and will be supplemented by additional emergency measures by some countries.
IEA members hold emergency stockpiles of over 1.2 billion barrels, with a further 600 million barrels of industry stocks held under government obligation. The coordinated stock release is the sixth in the history of the IEA, which was created in 1974. Previous collective actions were taken in 1991, 2005, 2011, and twice in 2022.
Dire Straits
The conflict in the Middle East that began on February 28 has impeded oil flows through the Strait of Hormuz, with export volumes of crude and refined products currently at less than 10 percent of pre-conflict levels. This is forcing operators across the region to shut in or curtail a substantial amount of production.
An average of 20 million barrels per day of crude oil and oil products transited the Strait of Hormuz in 2025, or around 25 percent of the world’s seaborne oil trade.
The IEA Secretariat will provide further details of how this collective action will be implemented in due course. It will also continue to closely monitor global oil and gas markets and to provide recommendations to Member governments, as needed.
Meeting earlier, G7 ministers reportedly raised the prospect of using the emergency stocks on March 9. However, French Finance Minister Roland Lescure they have not decided yet.
The IEA said in its March 2026 report that with few ships currently able or willing to load cargoes at port, and domestic storage tanks filling up, producers in the region are reducing or shutting in production. “While the situation on the ground is fast evolving and at times opaque, we estimate that crude production is currently being curtailed by at least eight million barrels per day, with a further two million barrels per day of condensates and Natural Gas Liquids (NGLs) shut in. Major supply reductions are seen in Iraq, Qatar, Kuwait, the UAE and Saudi Arabia,” the IEA report read
Global oil supply is projected to plunge by 8 million barrels per day in March, with curtailments in the Middle East partly offset by higher output from non-OPEC+ producers, Kazakhstan and Russia following disruptions at the start of the year. While the extent of losses will depend on the duration of the conflict and disruptions to flows, the IEA estimates global oil supply to rise by 1.1 million barrels per day in 2026 on average, with non-OPEC+ producers accounting for the entire increase.
The conflict is also having a significant impact on global product markets, with export flows through the Strait at a near standstill. Gulf producers exported 3.3 million barrels per day of refined products and 1.5 million barrels per day of Liquified Petroleum Gas (LPG) in 2025. More than three million barrels per day of refining capacity in the region has already shut due to attacks and a lack of viable export outlets. Runs elsewhere will be increasingly limited due to feedstock availability.
It should not be forgotten that as the conflict drags on, assuming energy prices increase, a number of marginal producers that may be inactive now will resume production and other countries with good market access will expand output to fill gaps, helping to restore balance.
Airline industry disruptions
Meanwhile, the suspension of flights at major airports in the Middle East, with a knock-on effect on hubs elsewhere, has materially reduced global jet fuel demand, according to the IEA report. Plunging LPG and naphtha supplies are already forcing petrochemical plants to curb their production of polymers, aggravating the loss of Gulf petrochemical flows, the IEA said. LPG use in cooking and heating, especially in India and East Africa, is also at risk.