The International Energy Agency (IEA) shared an update on emergency oil releases on Sunday (local time) as the US-Israeli war on Iran rages on. The agency said oil from the agency’s emergency reserves would soon begin flowing to global markets to address supply disruptions.
Earlier this week, the IEA announced it was releasing 400 million barrels of oil from its emergency stockpile to global markets in response to the disruption caused by the conflict in the Middle East.
In a report shared today, it said that member countries have submitted their individual implementation plans to the IEA, adding that the plans indicate that oil stocks will be made available immediately by member countries in Asia Oceania, while those of member countries in the Americas and Europe will be made available from the end of this month.
Oil discharges by member countries
According to the statement, the IEA noted that governments agreed to release 271.7 million barrels of oil from government stockpiles, 116.6 million barrels from mandatory industry stocks and 23.6 million barrels from other sources.
Most of the pledged reserves, 195.8 million barrels, will be released by member countries in the Americas, of which 172.2 million will be from government stocks.
Asia Oceania member countries have agreed to contribute a total of 108.6 million barrels, of which 66.8 million will come from government stocks and another 41.8 million from industrial stocks.
Europe pledged 107.5 million barrels, including 32.7 million from government stockpiles. The IEA statement says that 72% of projected releases are in the form of oil and 28% are petroleum products.
Why is the IEA releasing emergency oil?
The decision to release oil from its emergency stockpile comes as the US-Israeli war against Iran continues with no sign of abating. The conflict has now plunged the Middle East region into a wider military confrontation, but it also has an impact on countries outside the region.
After Israel killed Tehran’s former supreme leader Ayatollah Ali Khamenei in strikes on February 28, Iran retaliated by targeting US bases in the Middle East and launching attacks on Israel. The Islamic Revolutionary Guard Corps (IRGC) has announced the closure of the Strait of Hormuz, a key corridor that accounts for roughly 20% of the world’s oil supply. The IRGC’s decision caused panic and fear in the global energy market, with many fearing the days ahead.
The IEA’s decision to release oil from its 1.2 billion barrels of reserves is aimed at allaying these concerns and the subsequent increase in oil and gas prices.
Earlier this week, Tehran said the world should prepare for oil prices to hit $200 a barrel as its forces continue to target ships in the strait.
Oil prices are rising
Oil prices jumped to $120 a barrel earlier this week, sparking panic among traders and roiling global energy markets before retreating. Oil prices have jumped 30% since the start of the conflict.
