On Tuesday, the 31 countries in the International Energy Agency agreed to release 60 million barrels of oil from their strategic reserves “to send a strong message to oil markets” that supplies won’t fall short after the Russian invasion of Ukraine. Besides the United States, other members of the organization include Germany, France, the United Kingdom, Japan and Canada. IEA members hold emergency stockpiles of 1.5 billion barrels of oil. The release amounts to 4% of stockpiles, or roughly 2 million barrels per day for 30 days. It’s only the fourth time in history that the IEA has done a coordinated drawdown since the reserves were established in the wake of the Arab oil embargo in 1974.
The board of the Paris-based IEA made the decision at a meeting of energy ministers chaired by U.S. Energy Secretary Jennifer Granholm, who said in a statement that President Biden approved a commitment of 30 million barrels and that the U.S. is ready to “take additional measures” if needed. The group’s “decision reflects our common commitment to address significant market and supply disruptions related to President Putin’s war on Ukraine,” Granholm said.
Russia plays an outsized role in global energy markets as the third-largest oil producer. Its exports of 5 million barrels of crude per day amount to about 12% of the global oil trade. Some 60% goes to Europe and another 20% to China. IEA executive director Fatih Birol said: “The situation in energy markets is very serious and demands our full attention. Global energy security is under threat, putting the world economy at risk during a fragile stage of the recovery.”’
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