The escalating situation in the Middle East and threats to supplies through the Strait of Hormuz have once again put the use of strategic oil reserves on the agenda. Japan and Germany have announced their readiness to release part of their reserves to stabilize the market and cushion the price shock.

According to the International Energy Agency (IEA), member countries hold more than 1.2 billion barrels of government emergency oil reserves, and with mandatory commercial stocks included, another 600 million barrels.

G7 countries and the IEA have already agreed to release a record 400 million barrels of oil from their reserves. The reason: a sharp drop in oil exports from the Persian Gulf region amid escalating conflict with Iran. By some estimates, exports from the region have already fallen by more than 90%.

In this situation, governments of the world's largest economies are trying to deploy one of the key instruments of energy security: strategic oil reserves.

How much oil is in strategic reserves

Strategic reserves were created after the oil crisis of the 1970s precisely for situations like this—so that importing countries could compensate for supply disruptions in the event of changing market conditions.

Japan, for example, holds one of the largest reserves among oil importers: its stockpile is equivalent to roughly 254 days of domestic consumption, while the country's daily demand is around 3.1–3.4 million barrels of oil per day.

However, having substantial reserves doesn't necessarily mean they can be brought to market quickly and effectively. As Igor Yushkov explains, while the volumes of reserves are indeed large, they are distributed extremely unevenly:

"On the one hand, there's a lot—we're talking hundreds of millions of barrels. On the other hand, they're unevenly distributed across different countries, some have more, some have less."

He notes that coordination among consuming countries should happen through the International Energy Agency (IEA), which was created precisely for such situations. At the same time, he emphasizes:

"It (the IEA) was created to coordinate the activities of consuming countries in exactly these kinds of situations, when there's a shortage and countries need to share oil with each other to minimize the negative consequences of that shortage."

Why countries are reluctant to share oil

The main problem lies not so much in the volume of reserves as in politics. Despite formal coordination mechanisms, countries are reluctant to share their stockpiles. According to the expert, states have yet to agree on who will supply oil to the market and in what quantities. The United States holds the largest strategic oil reserves among Western countries—approximately 360 million barrels in the Strategic Petroleum Reserve (SPR). This is precisely why Washington finds itself in a difficult position. As Yushkov notes:

"They're interested in saturating the market in principle. But to do that, they would need to give these reserves to someone, to sell them, and that's what they're afraid to do."

According to him, there's also a political factor:

"Selling oil that could then end up going to China as a major importer, and trying to ensure it doesn't go to China but only to Japan or India—that's extremely difficult."

As a result, the formally existing system of collective action isn't working as intended.

How quickly strategic reserves can reach the market

Another key question is the speed at which reserves can be converted into actual supplies. Formally, oil is one of the most logistically convenient energy commodities. However, infrastructure and contract structures severely limit how quickly the market can respond.

According to the expert, one possible mechanism involves redirecting oil flows: countries can use their reserves for their own refineries while simultaneously reducing imports. He describes this mechanism as follows:

"We would supply our refineries from strategic reserves, so to speak, while refusing to import certain oil. What happens is that these now-unneeded tankers would turn around and instead of going to the United States, head to other markets."

Nevertheless, the possibilities for such redistribution are limited. The expert emphasizes that the key factor in balancing the market is not just increasing supply, but also falling demand. He notes:

"I think the market will actually balance not because everyone will be drawing oil from their strategic reserves, but because as prices rise, consumption volumes will decline."

How much oil the market could receive

If several countries simultaneously begin tapping their reserves, significant volumes could theoretically enter the market. G7 countries and the IEA have agreed to release 400 million barrels of oil from their reserves. However, according to the expert, the actual volume of supplies will fluctuate with price. He explains:

"Withdrawals from strategic reserves will increase as prices rise, thereby pushing those prices down. So we may not see a constant flow where certain volumes are pumped every day, but rather sporadic releases of volumes from strategic reserves onto the market."

The market may face not a steady inflow of oil, but waves of supply that will coincide with sharp price movements.

Will they affect prices?

Even if strategic reserves are actively deployed, this doesn't guarantee price stabilization. The expert believes that announcements about joint action by consumer countries may be more psychological in nature. In his view:

"Mostly all these stories about strategic reserves are symbolic statements designed to push oil prices down without any actual action."

The idea is to influence trader behavior in the futures market. As the expert explains:

"To convince traders that this will actually happen... and if prices are going to fall, then they need to sell futures now while they're still expensive."

However, there's also a reverse risk. If countries begin using their reserves individually, this could signal a real oil shortage. Yushkov warns:

"News will emerge that Japan has tapped its oil reserves, meaning the situation is bad... meaning the shortage has gotten to them that badly."

Strategic oil reserves remain an important tool for energy security, but their effectiveness is limited by political and economic factors.

Even if the largest economies begin actively using reserves, this is unlikely to fully compensate for potential supply disruptions from the Middle East.

As experience from past crises shows, the real mechanisms for balancing the market are more often linked not just to increased supply, but also to reduced demand—through rising prices and declining consumption.