IEA Proposes Record Release of Oil Reserves

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A key day for oil markets as countries consider a massive release from their strategic reserves.

Plus, how some of the biggest hedge funds got caught off guard by the war.

These are considered sort of the first-in-class hedge funds in the industry and they each lost a

billion or more for the week. And the AI boom continues powering up shares of Oracle.

It's Wednesday, March 11th. I'm Luke Vargas for the Wall Street Journal and here is the AM

edition of What's News, the top headlines and business stories moving your world today.

It's the scoop that has the business world talking. The journal's Matthew Dalton reports that

the International Energy Agency has proposed its largest ever release of oil reserves in an

effort to tame a recent run-up in crude prices with a decision expected today. To discuss this

potentially historic market intervention we've got Matt on the line with us from Paris today.

Matt give us the details of this proposal and then how it came about.

So the headline figure is a release of 400 million barrels of oil onto the market by the 32 member

countries of the International Energy Agency. It would be the largest release by quite a bit that

the agency has ever coordinated more than double what it put onto the market in 2022 when Russia

launched its full scale invasion of Ukraine. This is meant to address a scenario that is kind of what

the IAA was created for which is a catastrophic event on the oil market and that's what is

happening right now with the near complete closure of the straight-of-form moves due to Iranian

attacks. This came together very quickly because IAA member countries were pretty surprised by the

whole war itself. They weren't involved in a planning. This is a U.S.-Israeli operation and they

had to scramble to put together a plan which they have and it's not a done deal yet. We'll see

what happens today. You keep mentioning IAA member countries. There are several dozen of them but

presumably these reserves are not evenly distributed. Whose oil are we mostly talking about here that

would hit the market? The biggest share will come from the United States and its strategic petroleum

reserve as the largest oil consumer of the 32 member countries. It thus has the biggest

responsibility to put oil onto the market. The U.S. quantity will be less than half of what

ultimately is the market but it'll be close to half. Japan is also a big consumer and thus will

need to put a significant quantity of oil onto the market. The big European economy is Germany,

UK, France will also be big suppliers onto the market. Rebecca, just before we hit record,

Matt confirmed that the release we're talking about here could be 400 million barrels. You said,

oh wow, tell us about a release of this magnitude. What would it mean for oil markets?

It's significant because previously colleagues and I did calculations on how much reserve IAA members

have. They have about 1.2 billion barrels in public stocks and another 600 million in commercial

inventory so that would in total 1.8 billion barrels would roughly last about 124 days with the

loss supply from the Gulf. So now if they're looking at a potential 400 million barrels of release

that would back them a low calculation that would probably satisfy about 30 days of loss supply

from the Gulf, it shows the magnitude of the problem and kind of looking back on price action.

This morning we're seeing Brent and WTI both climbing. It kind of reminds me of an earlier incident

when March 2022, when IAA released barrels during the beginning of the Russian Ukraine war,

price actually rose as well in the first week after the decision and that's kind of a sign of

like traders looking at the numbers and thinking, oh my, like maybe the situation is actually much

worse than we thought and that's why price initially jumped and we're kind of seeing the same so far

this morning. Okay, I hear what you're saying and intervention this severe maybe signals to the

market things are worse than many people realize so that could explain the price reaction we're seeing.

But there are other jitters we're seeing supply related concerns coming out of the Gulf this morning

as well. Yeah, so when it comes to the oil prices of the current moment, I think the most important

news is still whether the straighter hormones is open or not and the straighter hormones is still

paralyzed. Just last night we had news that US officials said that Iran has placed minds in

the straighter hormones over the recent days. That's quite an escalation meant to shut down this

waterway. We also have reporting that US forces said that they've destroyed 16 Iranian

May laying vessels and then just this morning in London, UK maritime trade operations set that

to other cargo ships have reported damage near the straighter hormones so that would definitely

dissuade other tankers from crossing. Matt, that brings us to today. I'm curious when we're expecting

a decision on this possible release and given that you mentioned such a large share of this would

come from the US anyway. I mean, if for whatever reason this doesn't move forward, could the US

just act unilaterally? So the governing board of the IA is expected to me today to decide on this

generally these matters require unanimous consent for there to be a coordinated release. Yeah,

the US any country for that matter can go ahead and release stocks on its own. The IA is a body

sets guidelines for its members, but these aren't buying being necessarily on what countries can do

or not do in terms of the oil market for it to be a coordinated release. All the members really

have to act in concert together. You know, a big question going forward is what the timing of these

releases will be, how frequent they will be over how many days that will have a big impact on the

actual situation in the oil market. This kind of is the first step in the whole process is they're

signaling the overall magnitude, but then we're going to be working on getting more details about

what the actual flow of oil onto the market will be. I've been speaking to Wall Street Journal

reporters Matthew Dalton and Rebecca Fung. Matt, Rebecca, thank you both so much. Thanks, Luke.

Glad to be here. And we want to know how volatile energy and commodity prices are affecting you

or your business. Are you rethinking your plans today next week or later this year? Is your

bottom line being impacted? What about your pricing strategy? Let us know by sending a voice note

to WNPOD at WSJ.com or by leaving us a voice mount at 212-416-4328. And whoever you choose to

get in touch, just make sure to include your full name and your location so that we can use your comments on the show.

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Markets have been increasingly volatile since the conflict in the Middle East began 12 days ago.

And as we report, some of the world's heaviest investors have been caught out.

Markets reporter Caitlin McCabe says that major hedge funds like Citadel, 0.72 and millennium

suffered billions in losses following a sudden spike in bond yields. These are considered sort of

the first-in-class hedge funds in the industry and they each lost a billion or more for the week.

I think they've been surprised by two things. The strength and severity of the response from

Iran and also how much it's choked off oil markets. And so that has really turned on its head

these macroeconomic assumptions that hedge funds had going into this year. Investors were expecting

inflation to continue to moderate for central banks to cut interest rates. And now with $100

oil you start asking, is inflation going to rise again? And as a result, that's disrupted some

bond market bets that hedge funds had. So before last week, hedge funds were having a really strong

start to the year. Through the end of February for the year, they were up more than 3 percent.

And now, of course, we have these losses last week to consider.

In other Iran news this morning, authorities in the UAE say that four people have been wounded

after a pair of Iranian drones fell near Dubai International Airport. Despite the incident,

flights are continuing to and from the airport, which is the world's busiest for international

travel. While speaking of travel, the conflict and high oil prices may be driving up airfares,

but travel demand remains resilient. United Airlines says it recently recorded its highest revenue

booking day ever, signaling a robust appetite for both domestic and international flights.

CEO Scott Kirby attributed this to a strong U.S. economy.

Meanwhile, Boeing shares have slipped after the planemaker flagged delays to some deliveries of its

737 MAX jets. The company found scratched wiring and undelivered planes tracing the issue to

a machining error. The FAA is investigating the issue. The delay complicates Boeing's efforts

to convince regulators it's improved its safety issues after a door plug incident in 2024.

And Oracle shares have rallied more than 7 percent in off-hours trading.

That's after the cloud computing company posted higher quarterly revenue and raised its sales

outlook, saying that companies have a growing need for cloud services to train and run AI.

Democrat Sean Harris and Republican Clay Fuller are advancing to a run-off in Georgia,

following a special election yesterday to fill Marjorie Taylor Greene's vacated house seat.

Greene was one of Trump's most vocal supporters in the MAGA movement,

but resigned in January after falling out with the president. Trump endorsed Fuller in a crowded

field that included nine Republicans, and the district attorney said that the traditionally conservative

district still backs the president's policies. They want to know who President Trump was endorsing

in this race and that's why they came out in droves to support him because they know they want

an American first fighter on Capitol Hill fighting for his policies. Meanwhile, Harris,

a cattle farmer and retired general, said he wasn't concerned about Trump intervening in the race.

And guess what? His candidate came in second place, and I'm a firm believer that when we get

over head to head, come April 7th. You're going to be talking to me again because we're going to win it.

The winner will serve out the remaining months of Greene's term.

And finally, what does the president gift to his staff and White House visitors?

Some choose pens and cufflinks. FDR chose keychains, and President Trump likes to give out coins,

sharpies, and photos of himself. But our White House reporter Alex Leary says that lately,

he's been giving away his favorite pair of shoes. Trump star wearing floor shimes shoes

sometime late in 2025. He was telling AIDS at his feet were hurrying after a long day,

and tried out a couple of different brands and settled on floor shimes, which is a

Vanneville American brand. It was formed in 1892 in Chicago. It's sort of seen as sort of a lower

end or a mid-level shoe. They cost about $145, or even a White House he pays out of his own pocket.

He's been known to ask, and cabinet meetings, did he get the shoes, and he's also been

sort of guessing shoe sizes, looking down at people's feet, and you may be a 10. And he has a stack

of shoes in an office outside the Oval Office, but they also, he'll have an aid go and just order

some from floor shimes. Referring to the shoes, a female White House official said that all the boys

have them, and noting that they've created a sense of obligation on the part of those lucky enough

to receive them. One very funny thing about it is that AIDS in the White House, they have these,

and they're afraid not to wear them around Trump because he gave them to me. He's looking.

So it's sort of a funny thing, even though they don't quite like the shoe, or it doesn't fit that

well. We reported that one cabinet official joked that they put his Louis Vuitton's up on the shelf

that he had to wear the floor shimes instead. She's a funny kind of slice of life from the White House

and in Trump who never ceases to surprise. And that's it for what's news for this Wednesday morning.

Today's show was produced by Hattie Moyer and Daniel Bach. Our supervising producer is Sandra

Kilhoff, and I'm Luke Vargas for the Wall Street Journal. We will be back tonight with a new show.

Until then, thanks for listening.

How are artists, musicians, and filmmakers using AI tools to help bring storytelling and creative

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wherever you get your podcasts.