Iran war triggers global race to build oil reserves

Vulnerable countries that paid a high economic price during the Iran war are seeking to build domestic oil and gas storage buffers against future shocks, a drive that could bring roughly half a billion barrels of additional demand down the pike. While the near-total closure of the Strait of Hormuz cut off a fifth of global oil and liquefied natural gas supplies for over three months – reshuffling energy markets and boosting Brent crude to nearly $120 a barrel – it could have been far worse.

One key stabilizing force was the world’s ability to tap emergency reserves. Early in the conflict, all 32 members of the International Energy Agency agreed to a record 400 million-barrel release from strategic petroleum reserves (SPRs), with the U.S. contributing the largest share. The drawdown — the sixth since the energy watchdog's creation — validated a strategy forged after the 1973 Arab Oil Embargo, under which IEA members must hold emergency stocks equal to at least 90 days of net imports.