IEA proposes release of 400m barrels of oil from strategic reserves 

The International Energy Agency has agreed to release 400 million barrels of oil from its members’ strategic reserves, in an attempt to counter soaring global energy prices amid the United States-Israeli war on 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 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 in a statement on Wednesday.

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

IEA member countries hold more than 1.2 billion barrels of emergency oil stocks, with a further 600 million barrels of industry stocks held under government obligation.

Since the US and Israel launched their war on February 28, Iran has effectively closed the Strait of Hormuz, a crucial shipping route for oil produced by Gulf states. About a fifth of global oil supplies transit the waterway.

In response to the US and Israeli attacks, Iran has also targeted oil fields and refineries in Gulf Arab states, aiming at generating enough global economic pain to pressure the US and Israel to halt the war.

Germany and Austria said earlier they would release parts of their oil reserves following an IEA request for members to release the record 400 million barrels to help temper energy price spikes due to the Iran war. Japan also said it will release some of its reserves starting Monday.

Group of Seven (G7) energy ministers met Tuesday at IEA headquarters in Paris to look at ways to bring down prices. Birol said afterward that they discussed all available options, including making IEA emergency oil stocks available to the market.

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

This is a developing story…