"The current system involves oil that has already been produced and is stored so it can enter the market quickly. This approach was created by the International Energy Agency soon after its founding in the wake of the 1973-74 oil crisis, when Arab nations cut exports by as much as 25%."
"Strategic reserves have a twofold purpose: to replace a portion of the disrupted supply and to moderate the resulting increase in prices. In cases of a major loss to world supply, the International Energy Agency will propose a coordinated release from member countries."
The International Energy Agency will release 412 million barrels of oil from strategic reserves over four months due to the Iran war closing the Strait of Hormuz. This closure affects 20% of the world's oil supply. The concept of strategic oil reserves dates back to the early 20th century, with the U.S. Navy's transition from coal to oil. Current reserves are designed to cover at least 90 days of imports, with the U.S. reserve only covering 64 days. The reserves aim to replace disrupted supply and stabilize prices.
Read at Fast Company
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