The 32 member countries of the International Energy Agency (IEA) decided on Wednesday to unlock 400 million barrels of oil from their reserves – the largest release ever – in order to ease the impact of the Middle East war.
Strategic oil reserves act as a cushion in case of economic shocks or disruptions. Here’s how and why they came about.
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Why store oil?
Oil powers cars, boats and planes. Oil, which comprises nearly a third of global energy needs, is the primary resource that forms the raft of plastic-based everyday materials.
That makes it vital to the economy and that oil can play a critical role during conflict, Yves Jégourelle, co-director of the Cyclops think tank, pointed out in January.
Adequate supplies of oil along with other raw materials such as aluminum are necessary to wage war.
Countries, especially non-oil-producing countries, often build up reserve supplies in the event of geopolitical upheaval or supply chain disruption.
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What is the role of IEA?
Established in 1974 after the first oil shock of 1973, the IEA’s role was to ensure a secure supply of energy.
About 30 countries are members, including Australia, Austria, Belgium, Canada, Denmark, France, Germany, Italy, Japan, Mexico, New Zealand and the United States.
Each member is “responsible for holding oil stocks equivalent to at least 90 days of net oil imports” that can be mobilized if a crisis arises.
That could include “stocks held exclusively for emergencies and stocks held for commercial purposes,” be they crude oil or refined products, according to the IEA.
The aim is to “mitigate the negative economic consequences” of shortages or disruptions in supply.
precedents
The IEA should agree on collective action after assessing the barriers and current market conditions.
It has operated on five occasions: in 1991 in the run-up to the Gulf War, in 2005 after Hurricanes Katrina and Rita, in 2011 during the Libyan civil war, and twice in 2022 after Russia invaded Ukraine.
A barrel of US benchmark West Texas Intermediate crude crossed $100 and then $110 in recent days before pulling back.
How much of the current stock?
According to the IEA, the global oil market is in surplus from the beginning of 2025.
Global stocks topped 8.2 billion barrels last year, providing a “significant safety cushion against potential disruptions,” it said.
The planet consumes about 100 million barrels of oil every day.
IEA members hold more than 1.2 billion barrels of public emergency stocks, the organization says, as well as some 600 million additional barrels of stocks that governments require the industry to hold.
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What about non-members?
In Asia, where the Middle East is heavily dependent on oil imports, the situation is more concerning.
According to Bloomberg, China asked major refiners to freeze their diesel and gasoline exports in early March.
A large consumer of oil, particularly from the Middle East, China has amassed significant crude reserves of about 1.2 billion barrels in recent years, according to intelligence analysis from Kpler.
This is “about 115 days of its crude oil imports by sea”.
Another large-scale customer, India, has received a US waiver to buy 30 days of Russian oil supplies that are normally subject to international sanctions.
(With FRANCE 24 AFP)
(tags to translate)Middle East
