FACTBOX: Oil markets whipsaw as IEA announces record stock release

The International Energy Agency unanimously agreed to release 400 million barrels of oil from its strategic stocks on March 11 as the war in the Middle East continues to roil crude markets and raise the prospect of severe long-term energy shortfalls.

Japan led the way on the release, announcing prior to the IEA agreement that it would release crude from national and private-sector reserves to ease supply woes. The IEA stock release is the biggest in the history of the institution, which is made up mostly of developed oil-consuming nations.

Meanwhile, oil prices continued to whipsaw following mixed messages from Donald Trump's US administration about the likely duration of the war and the navigability of the Strait of Hormuz, and ships and infrastructure in the Persian Gulf continued to come under attack.

Trade flows

Consumers of crude and products were still scrambling to respond to supply bottlenecks as the war entered its 12th day.

• The IEA's planned release of 400 million barrels dwarfs the five previous collective actions, the largest of which was 180 million barrels across two tranches in 2022.
• Japan, which imports 90% of its crude from the Middle East, said March 11 that it would draw 15 days' worth of crude from private sector reserves and one month's worth from national reserves.
• Canada is prepared to coordinate the release of commercial stocks held by producers and refiners. "We maintain the ability to adjust transportation through marine and rail shipments should supply routes require reorientation," a Natural Resources Canada spokesperson said.
• In its monthly oil market report, OPEC said Saudi Arabia pumped 10.882 million b/d in February -- a month over month increase of almost 800,000 b/d -- as part of contingency planning ahead of a potential Iran war, but supplied 10.11 million b/d to the market.
• Vessel transits through the key Strait of Hormuz began to rebound March 10, with eight ships crossing, including two tankers, up from three vessels on March 9, according to S&P Global Commodities at Sea data.
• Two sanctioned tankers crossed the strait, one carrying Iranian LPG east and the other entering the strait and heading toward Iran.
• Crude loadings from the Gulf in March have averaged 10.2 million b/d, down from 18.7 million b/d in February.
• Oil product inventories at Fujairah in the UAE fell 21.5% in the week ended March 9, the biggest weekly drop since February 2022, according to Fujairah Oil Industry Zone data.

Prices

Prices remained volatile, rising again on March 11, after losing ground the previous day.

• Front-month ICE Brent crude futures were up 3.6% on the previous close as of 1435 GMT to $90.95/b, while NYMEX WTI futures were up around 3% to $86.47/b.
• Platts Dated Brent, the world's foremost physical crude benchmark, dipped almost 15% day over day on March 10 to $87.94/b, after Trump suggested the war could soon end.
• The Platts US Gulf Coast Export assessment was down 12% day over day to $85/b on March 10.
• The Brent-Dubai spread narrowed 15% to $7.85/b on March 11, having hit a four-year high on March 9.
• Northwest European jet fuel was assessed at $1,385/mt on March 10, reflecting a 5% drop day over day, after doubling in the days after the war began.
• Platts assessed ultra-low sulfur diesel out of Antwerp-Rotterdam-Amsterdam at $1,044/mt on March 10, down 11% day over day.
• The VLCC index for non-scrubber-fitted non-eco ships ended March 10 at $413,902/day, down 5% from the previous day.
• OPEC maintained its supply and demand forecasts for 2026 and 2027 in its monthly report but said geopolitics should be closely monitored.

Infrastructure

Attacks on March 11 appeared to focus on ships transiting the Gulf, with three vessels hit in quick succession.

• Iran's military said in a statement that it would not allow "a single liter of oil" to pass through the strait to reach the US, Israel or its partners, threatening to push oil prices to $200/b.
• Oil storage facilities were struck in the southern Omani port city of Salalah, an advisory from maritime security firm Ambrey said March 11.
• The US said 16 Iranian mine-laying vessels had been destroyed near the Strait of Hormuz.
• An unidentified container ship 25 nautical miles northwest of the UAE's Ras al Khaimah was damaged by a "suspected but unknown projectile," the UK Maritime Trade Operations said.
• A fire that broke out on board a cargo ship 11 nautical miles north of Oman after being hit by an unknown projectile has been extinguished, the UKMTO said.
• An unidentified bulk carrier 50 nautical miles northwest of Dubai was hit by an "unknown projectile", according to UKMTO.
• More Chinese refineries are cutting crude throughput and drawing on commercial inventories amid the Middle East supply crisis, 15 refining sources told Platts.