The International Energy Agency (IEA) has decided to release 400 million barrels of crude oil from the strategic reserves of member countries to contain rising prices amid the conflict in the Middle East and the virtual closure of the Strait of Hormuz.
Points of attention
- The International Energy Agency has taken an unprecedented step by releasing 400 million barrels of oil from strategic reserves to tackle rising prices amidst the Middle East conflict.
- IEA members have agreed to coordinate actions and release national reserves to stabilize the market and ensure energy security during challenging times.
IEA tries to lower oil prices
The 32 member countries of the International Energy Agency today unanimously agreed to release 400 million barrels of oil from their emergency reserves to address disruptions in oil markets caused by the war in the Middle East.
According to Executive Director Fatih Birol, the challenges in the oil market are of unprecedented scale, so it is important that IEA member countries have responded to this with emergency collective action of unprecedented scale.
Emergency stocks will be made available to the market for a period appropriate to the national circumstances of each Member State and will be complemented by additional emergency measures from some countries.
IEA members are reported to have emergency reserves of over 1.2 billion barrels, with another 600 million barrels of industrial reserves held under government obligations.
The coordinated stockpile release is the sixth in the history of the IEA, which was established in 1974. Previous collective actions were taken in 1991, 2005, 2011 and twice in 2022.
According to Spanish Energy Minister Sara Agesen, the current volume is more than double the level agreed in 2022 after Russia's full-scale invasion of Ukraine, when the agency's member countries released 182 million barrels in two stages.
Spain has already supported the use of strategic reserves. Germany and Austria have announced similar intentions. Japan, for its part, plans to start releasing reserves as early as Monday, without waiting for a formal decision from the IEA.
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