IEA Stock Release Hits 330 Million Barrels, Only 16 Days of Hormuz Flow, as Brent Holds $113.43

The International Energy Agency says members have released about 330 million barrels of the more than 400 million pledged in March. Governing board members agreed on October 15 to accelerate the remaining volumes, including more than 20 million barrels of diesel as soon as possible. The figures come from the IEA statement as reported by Reuters through the BOE Report.

Brent's January contract settled at $113.43 per barrel on Friday on ICE, up 2.37%, while WTI settled at $104.12 on the CME. Both benchmarks stand at six-month highs despite the largest coordinated stock draw in IEA history. Markets reopen Sunday evening.

Days of cover: the release measured against Hormuz

The Strait of Hormuz normally carries about a fifth of global crude and LNG, according to The National. Kpler data cited by Reuters in mid-October put Gulf crude flows at 8.5 million barrels per day, down from more than 20 million. Treating 20 million barrels per day as normal flow gives a usable yardstick.

At that rate, the 330 million barrels released so far equal about 16.5 days of normal Hormuz crude. The full pledge of more than 400 million barrels covers at least 20 days. The 20 million barrels of diesel equal about one day of normal strait flow.

Spread over time, the picture looks thinner. The March collective action began on March 11, so 330 million barrels over 218 days to October 15 averages 1.5 million barrels per day. Against an 11.5 million barrel per day drop in Gulf flows, stock releases have offset about 13% of the gap.

How much is left, and why the sources differ

Reuters reporting on the October 15 board meeting puts released volumes near 330 million barrels against pledges above 400 million. That arithmetic leaves at least 70 million barrels still to flow. Earlier coverage of the October 7 member meeting described the remaining pledged volumes as roughly 100 million barrels.

The difference matters for pace. Seventy million barrels equals 3.5 days of normal Hormuz flow, while 100 million equals 5 days. Neither figure changes the market's direction unless the strait reopens.

Europe adds its own draw

Trading Economics reported on October 29 that Europe plans to release 42 million barrels from its oil reserves over the next three months. Over roughly 92 days, that averages about 0.46 million barrels per day. The release is small next to the 11.5 million barrel per day Gulf shortfall.

Spain illustrates the national pace. Madrid will release 4.4 million barrels from strategic reserves in October, after releasing 3.7 million of its 11.5 million barrel March pledge. That brings Spain to 8.1 million barrels, or 70% of its commitment.

Diesel and the political clock

Diesel prices have reached record highs in many markets because of disrupted supply from the Middle East and Russia, per the Reuters report. President Donald Trump has pressed EU countries to draw down reserves or face a possible US diesel export ban. He is seeking lower fuel prices before the November 3 midterm elections.

Bloomberg reported that the United States told IEA members that current plans do not go far enough. Washington is asking for faster releases. The agency's members still held about 1.1 billion barrels of public emergency stocks, including over 200 million barrels of diesel, as of early October, per IEA statements summarized in press reports.

Forecasts disagree on what comes after

Saxo Bank expects crude to trade between $70 and $90 per barrel even after the conflict ends, compared with $60 to $70 before the war. Trading Economics models put Brent at $116.80 by quarter-end. The $27 difference between those two views is the war premium that stock releases have not removed.

Our earlier analysis of stranded Gulf crude flows estimated the daily value of shut-in barrels at $1.27 billion. Since then Brent has risen, and the stock release has added only a fraction of the lost flow. Producers watching the gap include Saudi Aramco, whose East-West pipeline carries some barrels around the strait.