Emergency Oil Reserves Released, But Prices Remain High Amidst Middle East Tensions
Jakarta, Indonesia – The coordinated release of the largest emergency oil reserves in history by the United States and its allies has yet to quell concerns about escalating oil prices. Over 30 countries across Europe, North America, and Northeast Asia agreed to release approximately 400 million barrels of oil to the global market in an effort to stabilize energy prices, but geopolitical factors continue to exert significant upward pressure.
Largest Ever Release Fails to Calm Markets
The United States is leading the effort, releasing 172 million barrels from its strategic oil reserves, representing 43% of the total coordinated release by the International Energy Agency (IEA). Tempo.co reported on March 12, 2026, that this is the largest release of emergency oil reserves in the IEA’s 50-year history.
Despite this substantial intervention, crude oil prices have actually increased by more than 17% since the announcement on March 11, 2026. Brent oil, the international benchmark, closed above US$100 per barrel for the second consecutive session on Friday, March 13, 2026. The Jakarta Globe noted this continued price surge in an article published on March 13, 2026.
Geopolitical Risks Drive Price Increases
Analysts attribute the sustained price increases to ongoing geopolitical instability in the Middle East. Attacks on tankers in the Persian Gulf and threats to the Strait of Hormuz, a critical shipping corridor carrying roughly 20% of the world’s oil supply (approximately 20 million barrels per day), are key drivers of market anxiety. The Jakarta Globe highlighted these concerns, noting that Iran has vowed to keep the trade route closed.
“Until transit is reactivated, such policy announcements will have limited impact,” said Tom Liles, senior vice president of upstream research at Rystad Energy, as quoted by IDN Financials on March 11, 2026.
Limited Impact of Reserve Release
While the 400 million barrel release could theoretically cover approximately 40 days of lost supply from the Strait of Hormuz, the reality is more complex. The release is occurring over time, and the daily volume is limited. The US will release 172 million barrels over 120 days, equating to roughly 1.4 million barrels per day – only 15% of the supply disrupted by the closure of the Strait of Hormuz. It takes time for released barrels to reach the market; it took at least 13 days for barrels to hit the market following President Trump’s authorization of a previous release.
Analysts at Bernstein argue that the amount of oil the IEA can release on a daily basis is insufficient to offset the larger disruptions. “It buys time, but it doesn’t solve the crisis,” they stated.
Indonesia’s Response
Indonesia is responding to rising global oil prices by maintaining fiscal discipline while accelerating efforts to reduce reliance on imported fuel. These efforts include expanding biofuel blending, boosting renewable energy development, and building strategic crude reserves to strengthen energy security. The Jakarta Globe reported that the Indonesia Crude Price (ICP) averaged $68.4 per barrel through March 11, 2026, remaining below the $70 assumption used in the 2026 state budget. The Finance Ministry currently sees no need to revise the budget, but acknowledges that prolonged price spikes could strain public finances.