Releasing strategic crude oil reserves is only a temporary solution.
2026-03-11 19:23:53
As Iran continues to threaten ships passing through the Strait of Hormuz, market focus is shifting to how the United States and other major economies will ensure the stability of global energy transportation. Against this backdrop, coordinated releases of strategic petroleum reserves have become one of the most closely watched policy tools.
Multiple media outlets have reported that the International Energy Agency (IEA) is discussing the largest emergency oil reserve release in history, potentially reaching 300 to 400 million barrels. The Wall Street Journal and other media outlets point out that this plan aims to address the risk of global oil supply disruptions following US and Israeli actions against Iran. If ultimately implemented, this would significantly exceed the 182 million barrels released during the 2022 Russia-Ukraine conflict, equivalent to approximately one-quarter to one-third of the IEA member countries' public emergency reserves.
From a policy perspective, this move is primarily aimed at stabilizing market sentiment and curbing oil price volatility in the short term. However, for the energy market, it's more like a "time buffer" than a solution that can truly change the supply and demand structure.
The Strait of Hormuz is the real core variable in oil prices.
The core risk in the current crude oil market does not lie in global inventory levels, but in whether oil can successfully pass through the Strait of Hormuz, a crucial shipping route. As one of the world's most important energy arteries, approximately 20 million barrels of crude oil are transported through this strait every day, accounting for a significant proportion of global seaborne oil traffic.
Recent reports from various sources indicate a significant deterioration in shipping conditions in the region. Some oil tankers have begun to disable their positioning systems for so-called "dark navigation," and some vessels have been forced to change course. Iran has also been accused of laying mines and threatening to attack ships attempting to pass through the strait. While the US Navy has destroyed some mine-laying vessels, its current escort capabilities remain limited, further fueling market concerns about shipping security.
In this context, even if the IEA releases 300 to 400 million barrels of strategic reserves, its effect may be quite limited. If shipping through the Strait of Hormuz is disrupted for an extended period, global oil supply could face a potential disruption of more than 10 million barrels per day, and even the largest reserve release in history could only fill a relatively limited window of time.
In other words, reserves can provide a short-term buffer, but cannot replace a stable flow of actual supply.
Reserve releases may actually boost demand in the future.
Beyond the short-term impact, there is a longer-term market logic behind the release of strategic reserves. Strategic reserves are essentially emergency buffers, not permanent sources of supply. Once the conflict ends, the depleted stocks will eventually need to be replenished.
Historical experience shows that releasing reserves often merely shifts demand from the present to the future, rather than eliminating demand itself. If the global economy maintains stable growth in the future, and supply-side expansion is limited, then the process of replenishing strategic stocks may itself become a new source of demand.
In this scenario, the reserves released now could translate into additional demand in the future, potentially driving up oil prices again at some point after the conflict ends. Therefore, from a long-term perspective, reserve releases can sometimes amplify future oil market volatility rather than alleviate it entirely.
The market has already seen some price policy intervention, but risk remains the dominant factor.
Judging from price performance, the market has already partially priced in the news of a possible reserve release by the IEA. Previously, as tensions escalated in the Middle East, Brent crude oil prices approached $120, but after the rumors of a reserve release surfaced, prices fell significantly.
Brent crude is currently fluctuating around $90 to $92, indicating that market sentiment has gradually shifted from initial geopolitical panic to expectations of policy intervention. However, this pullback has not changed the market's fundamental concerns about supply risks.
As long as the shipping risks in the Strait of Hormuz are not truly alleviated, the downside potential for oil prices remains relatively limited. In other words, the current oil market remains a typical "news-driven market," where any new information from the Middle East can quickly alter market expectations.
Technical Structure: $90 Becomes a Key Short-Term Pivot
(Brent crude oil 1-hour chart source: EasyForex)
From a technical perspective, Brent crude oil has recently formed a support structure in the $80 to $85 range. This area has been tested multiple times in the past few days but has remained stable, indicating a significant increase in buying interest in this region.
On short-term charts, oil prices have broken through the previous downtrend line, which is generally considered a bullish technical signal. As the market gradually digests the news of reserve releases, prices have returned to around $90, making this level a key pivot point for the current market.
If oil prices can stabilize above $90, they may open up further upside potential in the short term, with $95 becoming the next target, and $100 being a more significant psychological barrier. Once prices break through triple digits again, rising energy costs could put renewed pressure on global stock markets, while currencies of energy-dependent economies may face additional depreciation pressure.
Downside risks: $80 remains a key support level
On the downside, $80 remains the most important support level for Brent crude oil. This level has been tested multiple times recently but has consistently held, indicating a strong defensive presence in this price range.
In extreme circumstances, such as the IEA suddenly announcing a larger-than-expected release of reserves, oil prices could indeed fall below this level in the short term. Once $80 is breached, the market may quickly seek a new equilibrium around $70.
However, given the current highly uncertain geopolitical risks, the probability of a sustained decline is not high unless the situation in the Middle East cools down significantly.
Conclusion: The oil market remains in a geopolitically driven phase.
Overall, even if the IEA ultimately announces the largest reserve release in history, this measure is more likely to only temporarily alleviate market tensions rather than be a decisive factor in changing the global oil supply and demand landscape.
The real determining factors for current oil price trends remain the shipping conditions in the Strait of Hormuz and developments in the Middle East. As long as these risks are not substantially mitigated, the overall risk to oil prices remains skewed to the upside.
In this environment, the crude oil market will remain highly news-driven. Any new developments from the Middle East could trigger sharp price fluctuations in a short period, so traders need to remain cautious and always strictly control their risk exposure.
Multiple media outlets have reported that the International Energy Agency (IEA) is discussing the largest emergency oil reserve release in history, potentially reaching 300 to 400 million barrels. The Wall Street Journal and other media outlets point out that this plan aims to address the risk of global oil supply disruptions following US and Israeli actions against Iran. If ultimately implemented, this would significantly exceed the 182 million barrels released during the 2022 Russia-Ukraine conflict, equivalent to approximately one-quarter to one-third of the IEA member countries' public emergency reserves.
From a policy perspective, this move is primarily aimed at stabilizing market sentiment and curbing oil price volatility in the short term. However, for the energy market, it's more like a "time buffer" than a solution that can truly change the supply and demand structure.
The Strait of Hormuz is the real core variable in oil prices.
The core risk in the current crude oil market does not lie in global inventory levels, but in whether oil can successfully pass through the Strait of Hormuz, a crucial shipping route. As one of the world's most important energy arteries, approximately 20 million barrels of crude oil are transported through this strait every day, accounting for a significant proportion of global seaborne oil traffic.
Recent reports from various sources indicate a significant deterioration in shipping conditions in the region. Some oil tankers have begun to disable their positioning systems for so-called "dark navigation," and some vessels have been forced to change course. Iran has also been accused of laying mines and threatening to attack ships attempting to pass through the strait. While the US Navy has destroyed some mine-laying vessels, its current escort capabilities remain limited, further fueling market concerns about shipping security.
In this context, even if the IEA releases 300 to 400 million barrels of strategic reserves, its effect may be quite limited. If shipping through the Strait of Hormuz is disrupted for an extended period, global oil supply could face a potential disruption of more than 10 million barrels per day, and even the largest reserve release in history could only fill a relatively limited window of time.
In other words, reserves can provide a short-term buffer, but cannot replace a stable flow of actual supply.
Reserve releases may actually boost demand in the future.
Beyond the short-term impact, there is a longer-term market logic behind the release of strategic reserves. Strategic reserves are essentially emergency buffers, not permanent sources of supply. Once the conflict ends, the depleted stocks will eventually need to be replenished.
Historical experience shows that releasing reserves often merely shifts demand from the present to the future, rather than eliminating demand itself. If the global economy maintains stable growth in the future, and supply-side expansion is limited, then the process of replenishing strategic stocks may itself become a new source of demand.
In this scenario, the reserves released now could translate into additional demand in the future, potentially driving up oil prices again at some point after the conflict ends. Therefore, from a long-term perspective, reserve releases can sometimes amplify future oil market volatility rather than alleviate it entirely.
The market has already seen some price policy intervention, but risk remains the dominant factor.
Judging from price performance, the market has already partially priced in the news of a possible reserve release by the IEA. Previously, as tensions escalated in the Middle East, Brent crude oil prices approached $120, but after the rumors of a reserve release surfaced, prices fell significantly.
Brent crude is currently fluctuating around $90 to $92, indicating that market sentiment has gradually shifted from initial geopolitical panic to expectations of policy intervention. However, this pullback has not changed the market's fundamental concerns about supply risks.
As long as the shipping risks in the Strait of Hormuz are not truly alleviated, the downside potential for oil prices remains relatively limited. In other words, the current oil market remains a typical "news-driven market," where any new information from the Middle East can quickly alter market expectations.
Technical Structure: $90 Becomes a Key Short-Term Pivot
(Brent crude oil 1-hour chart source: EasyForex)
From a technical perspective, Brent crude oil has recently formed a support structure in the $80 to $85 range. This area has been tested multiple times in the past few days but has remained stable, indicating a significant increase in buying interest in this region.
On short-term charts, oil prices have broken through the previous downtrend line, which is generally considered a bullish technical signal. As the market gradually digests the news of reserve releases, prices have returned to around $90, making this level a key pivot point for the current market.
If oil prices can stabilize above $90, they may open up further upside potential in the short term, with $95 becoming the next target, and $100 being a more significant psychological barrier. Once prices break through triple digits again, rising energy costs could put renewed pressure on global stock markets, while currencies of energy-dependent economies may face additional depreciation pressure.
Downside risks: $80 remains a key support level
On the downside, $80 remains the most important support level for Brent crude oil. This level has been tested multiple times recently but has consistently held, indicating a strong defensive presence in this price range.
In extreme circumstances, such as the IEA suddenly announcing a larger-than-expected release of reserves, oil prices could indeed fall below this level in the short term. Once $80 is breached, the market may quickly seek a new equilibrium around $70.
However, given the current highly uncertain geopolitical risks, the probability of a sustained decline is not high unless the situation in the Middle East cools down significantly.
Conclusion: The oil market remains in a geopolitically driven phase.
Overall, even if the IEA ultimately announces the largest reserve release in history, this measure is more likely to only temporarily alleviate market tensions rather than be a decisive factor in changing the global oil supply and demand landscape.
The real determining factors for current oil price trends remain the shipping conditions in the Strait of Hormuz and developments in the Middle East. As long as these risks are not substantially mitigated, the overall risk to oil prices remains skewed to the upside.
In this environment, the crude oil market will remain highly news-driven. Any new developments from the Middle East could trigger sharp price fluctuations in a short period, so traders need to remain cautious and always strictly control their risk exposure.
- Risk Warning and Disclaimer
- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
