Global crude oil prices traded on a mixed note on Monday after the International Energy Agency (IEA) announced plans to release oil from emergency reserves to stabilize markets disrupted by the ongoing conflict in West Asia.
At 7:53 am, the April contract of benchmark Brent crude on the Intercontinental Exchange was trading at $103.95 per barrel, up 0.79%, while the April contract of West Texas Intermediate (WTI) on NYMEX was at $98.62 a barrel, down 0.09% from its previous close.
The move comes as the deepens an already fragile global energy market, with disruptions around the Strait of Hormuz raising concerns over crude and liquefied petroleum gas (LPG) supplies and keeping volatility elevated.
Emergency reserves
The IEA on Sunday said its member countries would release oil from emergency stockpiles to ease linked to the West Asia conflict.
IEA, on Sunday said: “Oil from the IEA emergency reserves will soon start flowing to global markets following the announcement on 11 March that IEA Member countries will make 400 million barrels of oil available to the market in response to the disruptions resulting from the Middle East conflict.”
“These plans indicate that stocks will be made available by IEA Member countries in Asia Oceania immediately while stocks from IEA Member countries in the Americas and Europe will be made available starting from the end of March,” it added.
This marks the sixth time that IEA member countries have taken collective emergency action to support oil markets since the agency was created in 1974. Previous coordinated releases were undertaken in 1991, 2005, 2011, and twice in 2022.
Limited relief
Despite the scale of the stock release, analysts say the move may only partly stabilize markets.
S&P Global Energy said on Friday that the planned release — the largest oil reserves distribution in history by the IEA — may “prove to be a bridge from a very unbalanced oil market to one that is less so”.
However, it warned that the measure would offer only limited relief if the Strait of Hormuz remains closed, according to a report.
Jim Burkhard, vice president and global head of crude oil research, S&P Global Energy said: “There is too much oil that cannot be exported via the Strait of Hormuz and not enough in Asia where stocks are running down. The market is seriously unbalanced and that will continue until the Strait is reopened and upstream and downstream operations return to normal. It will not happen quickly.”
Hormuz chokepoint
Concerns over oil flows through the , a critical global energy chokepoint, continue to weigh on markets as the war escalates.
US President Donald Trump has called on other countries to assist Washington in reopening the strait, which typically handles about 20% of global oil supply.
With no immediate response from other countries to his appeal, Trump warned in an interview with Financial Times on Sunday that NATO would face a “very bad” future if his proposal received “no response, or if it’s a negative response”.
Meanwhile, shipping activity through the waterway remains severely disrupted.
Citing the United Kingdom Maritime Trade Operations (UKMTO) centre, an Al Jazeera report said no more than five ships have passed through the strait each day since the start of the war, compared with a historical average of 138 daily transits.
India exposure
The volatility in crude oil prices is particularly significant for India, which imports nearly 90% of its oil requirement.
A $1-per-barrel increase in crude prices sustained over a year could raise the country’s annual import bill by around ₹16,000 crore.
The disruption has also begun affecting in India, triggering panic bookings of cooking gas cylinders and forcing the government to prioritise household consumers.