IEA meets on releasing potential oil reserves after Russia invasion

FILE PHOTO: A pump jack is seen at sunrise near Bakersfield
FILE PHOTO: A pump jack is seen at sunrise near Bakersfield, California October 14, 2014. REUTERS/Lucy Nicholson

March 1, 2022

By Yuka Obayashi, Kate Abnett and Noah Browning

TOKYO (Reuters) – Members of the International Energy Agency (IEA) will hold an extraordinary ministerial meeting on Tuesday that could lead to a coordinated release of oil stockpiles as Russia invades Ukraine strategy caused oil prices to skyrocket above 100 USD/barrel.

Crude oil traded around $103 a barrel on Tuesday as some buyers steered clear of Russian barrels after Western allies imposed sanctions on Moscow, while supplies around the world eased. tightening due to soaring economic demand, with output struggling to keep up. [O/R]

Disruptions from Russia, one of the world’s top oil producers that export around 4-5 million barrels per day (bpd) of crude, could drive oil prices even higher.

The meeting started at 1300 GMT and will end at 1500 GMT, the Japanese industry ministry said.

U.S. Energy Secretary Jennifer Granholm is chairing the Paris-based meeting of IEA member states, representing most of the industrialized nations, and has coordinated three emergency stockpile releases. in the past.

“Rising oil prices have caused concern around the world and this has sparked discussion about whether a coordinated IEA member release of a portion of the existing strategic reserves is needed to stabilize the market.” , said European Union energy policy director Kadri Simson. Second.

Simson added after a meeting of energy ministers from EU countries, many of which are also IEA members.

The 30-member IEA was created in 1974 as the energy watchdog and identified one of its main roles as helping “coordinate the collective response to major disruptions in the energy sector.” oil supply”.

Last November, the United States announced the release of 50 million barrels from the US Strategic Petroleum Reserve, a move made in conjunction with oil-consuming nations including China, India and Japan.

The IEA did not oversee that activity, saying at the time it was only responding to major supply disruptions. It coordinated its last release amid oil supply disruptions caused by the Libyan Civil War in 2011.

China, the world’s second-largest consumer and importer, has never officially committed to making that move and is instead buying more to stockpile.

The United States is responsible for about half of the world’s strategic oil reserves, and the other 29 members of the IEA – including the United Kingdom, Germany, Japan and Australia – are required to keep oil in their respective emergency reserves. equivalent to 90 days of net oil imports.

Japan has one of the largest reserves after China and the United States.

The IEA said last month that commercial oil inventories in OECD countries were at their lowest level in more than seven years and only met demand for less than 60-day futures in December. [IEA/M]

(Reported by Yuka Obayashi; written by Noah Browning; edited by Jason Neely, Jon Boyle and Emelia Sithole-Matarise) IEA meets on releasing potential oil reserves after Russia invasion

Caroline Bleakley

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