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The International Energy Agency (IEA) has proposed that its member governments jointly release up to 400 million barrels of oil from strategic stockpiles after the war with Iran triggered sharp increases in global crude prices.
If implemented, the move would represent the largest coordinated oil release in the agency's history, according to the proposal.
The IEA coordinates emergency responses among member countries to global oil supply disruptions.
"The conflict in the Middle East is having significant impacts on global oil and gas markets, with major implications for energy security, energy affordability and the global economy," IEA executive director Fatih Birol said Wednesday during a briefing from the agency's headquarters in Paris.
The proposal comes as the war has disrupted oil shipments through the Strait of Hormuz, a key global energy transit route.
Roughly a quarter of the world's seaborne oil supply passes through the narrow waterway, which has become too risky for most shipping.
The disruption has also created spillover effects in the Gulf region, with some oil-producing countries reducing output as storage capacity tightens.
Oil prices surged above $100 per barrel earlier in the week before easing after U.S. President Donald Trump suggested the war could be nearing an end.
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According to the Financial Times, Japanese Prime Minister Sanae Takaichi said Japan would take the lead in releasing oil from national reserves as early as next week.
The report also said Germany would comply with the request to release oil from its reserves.
The move would mark the first coordinated IEA reserve release since 2022, when member countries responded to the market shock following Russia's invasion of Ukraine.
Analysts said the strategic reserve releases would not solve the underlying market instability.
"The strategic reserves are not a permanent solution, of course, and crude oil will continue to trade like a 'meme stock' until the solution is peace," investment and advisory firm Macquarie said in a note ahead of the announcement.
Attention is also focused on how quickly barrels could be released from member countries' stockpiles and whether the release would include oil from the U.S. Strategic Petroleum Reserve.
Democrats have urged the administration to release oil from the reserve, but President Trump has been reluctant to do so.
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