The International Energy Agency plans the largest-ever release of oil reserves, causing oil prices to fall

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Investing.com - On Wednesday morning Asian trading, oil prices declined. Earlier, The Wall Street Journal reported that the International Energy Agency is planning the largest emergency release of oil reserves in history to offset the impact of the Iran conflict.

Brent crude futures for May fell 0.5% to $87.37 per barrel, while U.S. WTI crude futures dropped 0.4% to $81.78 per barrel, as of 20:46 Eastern Time (00:46 Beijing Time). Minutes after the WSJ report was published, oil prices fluctuated sharply and then trended downward.

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The Wall Street Journal reported that the IEA has proposed releasing a record amount of oil, with member countries set to review the proposal on Wednesday. This emergency reserve release is expected to exceed the record 182 million barrels released during the Russia-Ukraine war in 2022.

The release aims to address the worsening disruption of oil supply caused by Iran’s nearly complete blockade of the Strait of Hormuz. This strait is a critical shipping lane carrying about 20% of the world’s oil supply.

The large-scale release by the IEA could help limit some supply disruptions caused by the US-Israel and Iran conflict. However, a long-term blockade of the Strait of Hormuz would severely disrupt oil and natural gas supplies across multiple regions in Asia.

Reports indicate that Iran attacked ships passing through the strait earlier this week, and Tehran has also laid mines in the waterway.

Iran has stated that ships will only be allowed to pass through the strait if the US and Israel cease their attacks on the country.

Earlier this week, reports also showed that the G7 plans to release oil reserves to help offset supply shortages. Additionally, the US announced it would temporarily lift some sanctions on Russian oil sales to improve crude oil supply.

This article was translated with the assistance of artificial intelligence. For more information, please see our Terms of Use.

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