The IEA agrees to release 400 million barrels of oil from strategic reserves | energy news

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The proposed release is larger than the 182 million barrels of oil that IEA members released after Russia invaded Ukraine in 2022.

The International Energy Agency agreed to release 400 million barrels of oil from its members’ strategic reserves, in a bid to counter rising global energy prices amid the United States and Israel’s war against Iran.

The proposed release is larger than the 182 million barrels of oil that IEA member countries released in 2022 after Russia launched its full-scale invasion of Ukraine.

“The oil market challenges we face are of unprecedented scale, therefore I am very pleased that IEA member countries have responded with collective emergency action of unprecedented magnitude,” IEA Executive Director Fatih Birol said in a statement on Wednesday.

“Without enough routes to market and no more storage available, Middle East oil producers have begun to reduce production,” Birol said. “And we have seen more attacks and damage to energy and energy-related infrastructure. Refinery operations have also been disrupted, with significant implications for the supply of jet fuel and diesel in particular.”

IEA member countries hold more than 1.2 billion barrels of emergency oil reserves, and another 600 million barrels of industrial reserves are held under government obligation.

Since the United States and Israel launched their war on February 28, Iran has effectively closed the Strait of Hormuz, a crucial shipping route for oil produced by the Gulf States. About a fifth of the world’s oil supply transits this waterway.

In response to attacks by the United States and Israel, Iran has also attacked oil fields and refineries in the Arab Gulf states, aiming to generate enough global economic pain to pressure the United States and Israel to stop the war.

Germany and Austria previously said they would release some of their oil reserves following a request by the IEA for members to release a record 400 million barrels to help moderate energy price increases due to the Iran war. Japan also said it will release some of its reserves starting Monday.

Energy ministers from the Group of Seven (G7) met on Tuesday at the IEA headquarters in Paris to look for ways to lower prices. Birol later said they discussed all available options, including making the IEA’s emergency oil stocks available to the market.

The IEA reserves were established in 1974 following the Arab oil embargo.

This is a developing story…