IEA to release record 400 million barrels of oil to address Iran war

The International Energy Agency decided on Wednesday to release 400 million barrels of oil to address the supply disruption triggered by the Iran war, the largest action in the agency’s history.

The IEA has not set a timeline for when the shares will hit the market. He said the reserves would be released within a timeframe appropriate to the conditions of each of the 32 member countries.

IEA members consist primarily of developed economies in Europe, North America and Northeast Asia. The organization’s mission is to protect global energy security. The company was founded in 1974 in response to an oil embargo imposed by Arab producers due to U.S. support for Israel during the 1973 Arab-Israeli war.

IEA Executive Director Fatih Birol, in his speech broadcast from the group’s headquarters in Paris, said, “The conflict in the Middle East has significant impacts on global oil and gas markets; it has important consequences on energy security, energy affordability and the global economy of oil.” he said.

“I can now announce that IEA countries have unanimously decided to release the largest emergency oil stockpile in the history of our institution,” Birol said. he said.

The IEA chief said this release was designed to address the immediate effects of the supply disruption. However, Birol said tanker traffic should continue through the Strait of Hormuz to ensure a stable flow of oil and gas to the global market.

Energy analysts warned ahead of this announcement that even the IEA’s maximum offloading capacity would likely not offset the nearly 20 million barrels per day passing through the Strait of Hormuz.

The waterway is a narrow sea corridor off the coast of Iran that connects the Persian Gulf and the Gulf of Oman. Roughly 20% of global oil and gas usually passes through here.

Oil prices have been extremely volatile since the start of the Iran war on February 28; The global benchmark Brent crude oil rose to around $120 per barrel at the beginning of the week, then fell below $90.

Earlier in the day, Japanese Prime Minister Sanae Takaichi said the country plans to release oil stocks from its national reserves starting next week, citing an “extraordinarily high level of dependence” on the Middle East.

“Japan, in cooperation with the International Energy Agency (IEA), has decided to take the lead in releasing stockpiles as early as the 16th of this month in order to facilitate supply and demand in the international energy market, without waiting for an official decision on the release of international stockpiles,” Takaichi told reporters, according to the public broadcaster. NHK.

IEA members right now It holds more than 1.2 billion barrels of public emergency oil stockpile, and another 600 million barrels of industrial stockpile is held under government obligation.

The global energy watchdog had previously released an estimated 182 million barrels of oil to support the energy market following Russia’s full-scale invasion of Ukraine in 2022.

This is an evolving story. Check back for updates.