IEA to release 400m barrels of oil, its largest ever reserve release, amid US-Iran war
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The news: The 32 Member countries of the International Energy Agency (IEA) have unanimously agreed to make 400 million barrels of oil from their emergency reserves available to the market to address disruptions in oil markets stemming from the war in the Middle East, the agency said on Wednesday.
The context: The agency said that the decision to take emergency action was made following an extraordinary meeting of IEA Member governments on Tuesday to assess market conditions amid the conflict in the Middle East. Countries voted on the move during a meeting on Wednesday.
The agency said the stocks will be made available to the market over a timeframe that is appropriate to the national circumstances of each Member country and will be supplemented by additional measures by some countries.
The IEA said that it will release further details around how the release will be implemented in due course.
“The oil market challenges we are facing are unprecedented in scale, therefore I am very glad that IEA Member countries have responded with an emergency collective action of unprecedented size,” said IEA executive director Fatih Birol.
“Oil markets are global so the response to major disruptions needs to be global too. Energy security is the founding mandate of the IEA, and I am pleased that IEA Members are showing strong solidarity in taking decisive action together.”
Earlier on Wednesday, Japanese Prime Minister Sanae Takaichi told reporters that Japan, which holds the largest oil reserves among G7 nations, will take the lead and release oil from its national reserves as early as next week.
Germany’s economy minister Katherina Reiche said that the IEA had asked its members to release 400 million barrels worth of oil reserves and that Germany will comply with the IEA request to release oil from its reserves.
The release is intended to counter the massive disruption to global oil supplies caused by the almost complete closure of the Strait of Hormuz, through which around one-fifth of the world’s moves. Threats of attacks on oil tankers by Iran has effectively halted shipments, with three ships having been hit on Wednesday.
The numbers: IEA members hold emergency stockpiles of over 1.2 billion barrels, with a further 600 million barrels of industry stocks held under government obligation. The coordinated stock release is the sixth in the history of the IEA, which was created in 1974. Previous collective actions were taken in 1991, 2005, 2011, and twice in 2022.
