International Energy Agency suggests releasing 400 million barrels of oil

The International Energy Agency (IEA) has agreed to release 400 million barrels of oil from its members’ strategic reserves as part of an effort to address rising global energy prices. The proposed release exceeds the 182 million barrels of oil released by IEA member countries in 2022 following Russia’s invasion of Ukraine.

According to Fatih Birol, IEA executive director, the oil market challenges facing the world are unprecedented in scale. In response, IEA member countries have taken an emergency collective action of significant size. The move comes as Middle East oil producers have reduced production due to insufficient routes to market and limited storage capacity. Additionally, refinery operations have been disrupted, affecting jet fuel and diesel supplies.

IEA member countries hold over 1.2 billion barrels of emergency oil stocks, with an additional 600 million barrels held under government obligation. The release is part of a broader effort by the US and Israel to counter Iran’s actions in the region. Iran has effectively closed the Strait of Hormuz, a critical shipping route for oil produced by Gulf states, and targeted oil fields and refineries in Gulf Arab states.

In response to the IEA request, Germany and Austria have agreed to release parts of their oil reserves, while Japan will also start releasing some of its reserves starting Monday. A meeting of G7 energy ministers took place at the IEA headquarters in Paris to discuss ways to reduce energy prices. The IEA reserves were established in 1974 following the Arab oil embargo.

Source: Al Jazeera