IEA members agree to release 60 million barrels of oil after Russian invasion

By Yuka Obayashi and Noah Browning

TOKYO (Reuters) – Member states of the International Energy Agency (IEA) agreed on Tuesday to release 60 million barrels of oil reserves, Japan’s industry minister said, as the United States and their allies are seeking to calm oil prices due to the Russian invasion of Ukraine.

Half of the volume will come from the United States, Koichi Hagiuda told reporters after the extraordinary ministerial meeting of the 31 members of the IEA, which mainly represents industrialized countries.

“We have agreed that the IEA (members) as a whole will conduct a coordinated release of oil totaling 60 million barrels,” Hagiuda told reporters.

Oil markets were unaffected by the news, with Brent crude surging above $106 a barrel, its highest level since 2014.

Prices jumped as some buyers shunned Russian barrels after Western allies imposed sanctions on Moscow, while supplies around the world tightened as economic demand soared as production struggled to be continued. [O/R]

A disruption from Russia, one of the world’s top oil producers that exports about 4 to 5 million barrels per day (bpd) of crude, could drive prices higher.

US Energy Secretary Jennifer Granholm chaired the meeting of the Paris-based IEA, which has coordinated three emergency oil stockpile releases in the past.

Founded in 1974 as an energy watchdog, the IEA thus defines one of its main roles as that of helping to “coordinate a collective response to major disruptions in the supply of oil”.

SUPPLY DISRUPTION

Last November, the United States announced the release of 50 million barrels of the United States Strategic Petroleum Reserve, a decision taken in concert with oil-consuming countries, including China, India and Japan.

The IEA did not oversee this operation, saying at the time that it only responded collectively to major supply disruptions. He last coordinated a release amid the disruption to oil supplies caused by the Libyan civil war in 2011.

China, the world’s second-largest consumer and largest importer, never officially went down this road and instead bought more for its reserves.

Biden has faced heavy criticism from political opponents who say his climate-friendly policies have capped energy production in the United States and driven up energy prices.

The US is responsible for around half of the world’s strategic oil reserves and the other 29 IEA members – including the UK, Germany, Japan and Australia – are required to hold oil into emergency reserves equivalent to 90 days of net oil imports.

Japan has one of the largest reserves after China and the United States.

The IEA said last month that commercial oil stocks in OECD countries were at their lowest level in more than seven years and covered just under 60 days of forward demand in December. [IEA/M]

(Reporting by Reuters Energy Newsroom; Writing by Noah Browning in London; Editing by Jason Neely, Jon Boyle and Emelia Sithole-Matarise)


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Felix J. Dixon