IEA proposes record oil release in response to Iran war
The International Energy Agency has recommended the release of 400 million barrels of oil, the biggest move in its history, in a bid to rein in rising crude prices during the US-Israeli war with Iran.
The IEA said the release was agreed unanimously by 32 member countries and its timing will be determined in due course.
The Paris-based IEA made its comments after French President Emmanuel Macron chaired a meeting of G7 leaders to discuss the issue.
German Economy Minister Katherina Reiche had previously confirmed reports regarding the 400 million barrel figure and said that her country would participate in this release.
He added that the USA and Japan would make the biggest contribution to the IEA’s statement.
“The pressure came mainly from the US government, which wanted this statement,” said a European Union diplomat speaking before the IEA’s announcement.
US Secretary of the Interior Doug Burgum welcomed reports of the planned evacuation.
“This is a perfect time to consider launching some of these to relieve some of the pressure on the global price,” he said in an interview with Fox News.
But Burgum said he doesn’t believe the world is facing an energy shortage.
“We have a temporary transportation problem,” he said.
“You have a temporary transit problem that we have resolved, can and will resolve militarily and diplomatically.”
The IEA’s proposal that its members would provide 400 million barrels of oil from emergency reserves is a larger stockpile than the 182.7 million barrels released in 2022 by the organization’s 32 member states in response to Russia’s full-scale invasion of Ukraine.
“Middle East oil producers have begun to reduce production due to lack of sufficient routes to reach the market and lack of storage,” IEA Executive Director Fatih Birol said on Wednesday. he said.
“We have also seen other attacks and damage to energy and energy-related infrastructure. Refinery operations have also been disrupted, with major impacts particularly on jet fuel and diesel supplies.”
IEA member countries currently hold public emergency oil stocks of more than 1.2 billion barrels, with 600 million barrels of industrial stock held under government obligation.
Analysts said the pace of the IEA’s daily stock releases would be no more important than overall size.
If 100 million barrels are released next month, the daily rate will reach approximately 3.3 million barrels; This is part of the current cut of around 20 million barrels per day, along with the de facto blocking of the Strait of Hormuz between Iran and Oman.
Oil prices rebounded on Wednesday as markets doubted whether the IEA’s plan could offset potential supply shocks from the conflict.
with AP
