The IEA’s record 412 mn barrel oil release won’t close the gap — and Iran is making sure of it

IEA member countries pledged overnight to release nearly 412 mn barrels of crude, including some 271 mn from public stocks. That’s more than double what they released in a bid to smooth-out the market after Russia’s invasion of Ukraine, the previous record.

It ain’t gonna make a difference, folks: Pundits suggest the fastest member states can get crude to market is at a rate of about 2 mn bbl/d. With Hormuz shut, the global market is losing nearly 20 mn bbl/d that can’t move through the strait. And even with rising production from folks who can still ship to market, production is on track to decline 8 mn bbl/d in March, IEA estimates. There’s a reason folks are calling this the largest-ever supply disruption to the global oil market. Brent crude is north of USD 104 / bbl this morning.

The math gets worse when you look at the timeline. Japan, South Korea, Australia, and New Zealand will start releasing their 109 mn bbl immediately, but the bulk from the Americas and Europe won’t hit the market until the end of March. “It buys time, but it does not solve the crisis,” Bernstein analysts told clients.

And Iran is methodically targeting the infrastructure that was supposed to be the workaround. Oil loading at Fujairah — which sits outside Hormuz and connects to Abu Dhabi’s oil fields by pipeline — is back online after a drone-sparked fire stopped operations on Saturday, Bloomberg reports. Authorities haven’t said when full operations will resume. Adnoc had already shut its Ruwais refinery earlier in the week after a drone strike sparked a fire.

The Fujairah strike came hours after Iran issued an unprecedented threat against three major UAE ports — Fujairah, Dubai’s Jebel Ali (the Middle East’s busiest container port), and Abu Dhabi’s Khalifa port. Tehran’s Mizan news agency, linked to the IRGC, claimed the US had used the ports to launch strikes on Iran’s Kharg Island. RBC analyst Helima Croft put it bluntly: the IRGC is signaling that there is “ no safe harbor.”

BACKGROUND- Massive fires broke out in fuel storage tanks at Oman’s Salalah Port last Wednesday after a coordinated drone strike. Salalah, sitting on the Arabian Sea outside Hormuz, was supposed to be another workaround — a major transshipment hub that expanded its capacity to 6.5 mn TEU just last year.

Iran’s warning that it would target US-linked banking interests also rang true, with debris from an intercepted drone damaging the outside of a building in DIFC.

No deal, no timeline

US President Donald Trump says the US rejected an Iranian suggestion it was open to a truce, asking for “better terms” without clarifying what those terms would be (listen, runtime: 5:02). “Iran wants to make a deal, and I don’t want to make it because the terms aren’t good enough yet,” he told NBC News on Saturday.

Tehran begs to differ. Iran’s Foreign Minister Abbas Araghchi flatly denied seeking a ceasefire or talks in a CBS Face the Nation interview on Sunday. “We are ready to defend ourselves as long as it takes.” Reuters reports that both Washington and Tehran had separately rebuffed mediation efforts by Oman and Egypt.

Trump called on China, France, Japan, South Korea, the UK, and others to send warships to help reopen Hormuz. The response so far: nothing concrete. France has not committed, the UK said it is “exploring options,” and South Korea said it “takes note.” US Energy Secretary Chris Wright said he expects China to be a “constructive partner” — but Beijing has said nothing publicly, and as one analyst noted, China doesn’t need to help because Iranian oil is already flowing to China.

Also on our radar:

• Israel says it is planning at least three more weeks of strikes, saying it has “thousands of targets” remaining. Trump administration officials offered a similar timeframe, saying they expect the conflict to end “within weeks or sooner.”
• Iran says 56 museums, historic buildings, and cultural sites have been damaged by US-Israeli strikes, CNN reports, citing Iranian state media.