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Energy agency ’embarrassed’ over Biden oil reserve tap: report

The International Energy Agency was surprised by the Biden administration’s March 31 announcement that it would release 180 million barrels of oil from reserves in the following six months, according to a new report – with a source telling Reuters the organization was “embarrassed”. that they had not been informed beforehand about the move that they had done so.

The intelligence service reported Monday, citing “two sources familiar with the matter,” that the White House failed to notify the IEA that it would announce releases from the Strategic Petroleum Reserve (SPR) a day before an extraordinary meeting of the organization to discuss a coordinated expansion of offerings.

“The IEA was embarrassed [US] Release, which initially was carried out essentially unilaterally by the US,” one of the sources was quoted as saying.

“It is the common understanding among IEA members that we need to work together as a whole,” said another source, adding that the announcement came as a surprise.

At the time, President Biden announced that his administration would release 1 million barrels of oil per day to offset gas price hikes linked to rising inflation and sanctions imposed on Russia for its invasion of Ukraine.

A maze of crude oil pipes and valves is pictured during a Department of Energy tour of the Strategic Petroleum Reserve in Freeport, Texas, June 9, 2016.
The International Energy Agency said the Biden administration’s move was “embarrassing.”
REUTERS/Richard Carson

At the time, the president said the order could result in prices at the pump “going down quite significantly.”

After the extraordinary meeting the following day, Reuters reported, the IEA leadership persuaded the organization’s 30 non-US member countries to collectively release another 60 million barrels.

However, under the organization’s rules, the coordinated release should have matched the 180 million barrels announced by the US.

“It wasn’t feasible,” said one of the sources. “That was impossible because nobody had such supplies.”

US Secretary of Energy Jennifer M. Granholm, left, and IEA Executive Director Fatih Birol attend the closing media conference at the International Energy Agency (IEA) ministerial meeting in Paris on Thursday, March 24, 2022.
US Energy Secretary Jennifer Granholm told IEA officials the US was “taking steps” to ensure communications remain clear.
AP/Michel Euler

According to the report, the IEA tried to cover up the discrepancy by issuing a statement announcing an agreed release of 120 million barrels, with half of that number to come from the US over the following two months.

“The look of the release, which is 75% US and 25% rest of the world, is just weird,” a source told Reuters.

Senior Energy Department officials on Monday denied that the IEA was left in the dark about the forthcoming release, telling the Post that Energy Secretary Jennifer Granholm mentioned to her counterparts during the agency’s regular ministerial meeting the week before the announcement that the U.S doing so would “take action.”

“We take very seriously the importance of sharing information because it will make our collective response efforts more effective,” said an official.

The senior official insisted the department is in constant communication with the IEA “weekly, and I would say probably more like daily”.

The IEA told The Post that the agency “remains in close contact with all member countries, including the US ahead of theirs, during deliberations and decision-making related to both collective actions (the decisions taken on March 1 and April 1). announced decision on March 31 to release SPR oil.”

“This consultation, as well as the decisions to take collective action, have been conducted in accordance with IEA procedures, which include agreed steps to be taken in coordinating the collective release of stockpiles among IEA members,” the agency said.

IEA Executive Director Fatih Birol delivers his speech at the opening session of the International Energy Agency (IEA) Ministerial Meeting on Wednesday 23 March 2022 in Paris.
The IEA issued a statement announcing an agreed release of 120 million barrels, with half of that figure coming from the US over the following two months.
AP/Michel Euler

Formed after the 1973 oil crisis, the IEA has long attempted to promote a “collective response system” to “mitigate the negative economic impact of sudden oil supply shortages by making additional oil available to the world market.”

Energy Department officials on Monday shrugged off concerns about the magnitude of the US release compared to the rest of the IEA members.

“It would be kind of crazy to imagine the US releasing the same amount of oil in a collective response… [as] like, I don’t know like Ireland,” a Post official said. “I mean, that just wouldn’t count. There is clearly a demarcation based on the size of the economy.”

“The IEA is … an organization that really reinforces our collective response to energy security emergencies,” said another senior official. “And in this case we have worked very hard in all cases to coordinate with the IEA with its 31 members and the Secretary.”

The IEA also stressed to The Post that each member country “has the ability to release strategic reserves regardless of national circumstances to deal with a domestic disruption, or, as in this case the US SPR, to additionally release the class action of the IEA.”

“There are numerous instances in the past where countries have used their strategic reserves for internal disruption,” the IEA continued.

The White House did not immediately respond to the Post’s requests for comment.

https://nypost.com/2022/05/09/energy-agency-embarrassed-by-bidens-oil-reserves-tap-report/ Energy agency ’embarrassed’ over Biden oil reserve tap: report

JACLYN DIAZ

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