Wolfe Research: IEA's Record Oil Reserve Release "Should Buffer" Iran War Impact

LootboxPhobia · 2026-03-11T18:55:21+00:00

The International Energy Agency has released 400 million barrels of oil reserves to respond to the Iran conflict, aiming to buffer the impact on oil prices. Although this move did not significantly affect the market response, it is expected to mitigate the impact of the Strait of Hormuz closure. Wolfe Research suggests that this measure is important in terms of overall scale, but attention should still be paid to the reopening of the strait.

LootboxPhobia

2026-03-11 18:55:21

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Investing.com - According to Wolfe Research, the International Energy Agency (IEA) has taken a record step by releasing 400 million barrels of emergency oil reserves to counter the surge in oil prices caused by the Iran conflict, which should help cushion market shocks.

Wolfe Research considers this move to be “the most important policy measure reportedly being discussed by the White House,” but is still awaiting detailed information on the release speed and timing.

On Wednesday, after media reports outlined the IEA’s plan, oil prices initially fell but then reversed and steadily rose, ultimately showing little reaction to the official IEA announcement. Brent crude futures expiring in May rose by 5.2% to $92.25 per barrel, while WTI crude futures increased by 5.3% to $87.93 per barrel.

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“The market’s reaction to this announcement was not significant because we believe it was largely priced in by Monday,” said Tobin Marcus of Wolfe Research in a report. “After crude oil prices touched the $120 level on Sunday night, they sharply retreated on Monday, which we largely attribute to reports that the G7 would undertake this large-scale strategic petroleum reserve release.”

“This speculation has pulled the benchmark crude price back into the $90-100 range, then Trump started to suppress oil prices by saying the war is ‘very close to being over,’” Marcus added.

According to Wolfe Research, the speed and timing of this record reserve release are crucial to understanding how much this measure will offset the impact of a potential closure of the Strait of Hormuz, through which one-fifth of the world’s oil supply flows.

“In terms of overall scale, if the Strait of Hormuz were completely closed, 400 million barrels would be equivalent to about 20 days of transportation through the Strait,” Marcus said.

Wolfe Research warns that the IEA’s move will not “eliminate the need to reopen” the strait.

“This strategic oil reserve release is very significant and should buffer the impact of war on the oil market. Easing sanctions on Russian oil could also help alleviate some pressure. However, other measures being considered, in our view, are unlikely to have a meaningful impact—either because Trump cannot unilaterally implement them (such as a federal gasoline tax holiday), or because they are too insignificant and irrelevant (such as exemptions from the Jones Act), or because they are destructive and could backfire (such as export bans on crude oil and refined products),” Marcus said.

“We do not expect more help after this,” Marcus added.

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