All 31 countries that are members of the International Energy Agency have agreed to release 60 million barrels of oil from their strategic reserves “to send a strong message to oil markets” that there will be “no shortfall in supplies” as a result of Russia's invasion of Ukraine, the group said Tuesday.
The IEA board made the decision at an extraordinary meeting of energy ministers chaired by US Energy Secretary Jennifer Granholm. Besides the United States, other members of the organization include the United States, Germany, France, the United Kingdom, Japan, and Canada.
IEA members hold emergency stockpiles of 1.5 billion barrels of oil. The release amounts to 4 per cent of stockpiles or roughly 2 million barrels per day for 30 days.
“The situation in energy markets is very serious and demands our full attention,” IEA executive director Fatih Birol said. “Global energy security is under threat, putting the world economy at risk during a fragile stage of the recovery.”
Russia plays an outsized role in global energy markets as the third-largest oil producer. Its exports of 5 million barrels per day of crude, amounting to about 12 per cent of global oil trade. Some 60 per cent goes to Europe and another 20 per cent to China.
The decision came as oil prices soared Tuesday, with US benchmark crude surpassing $100 per barrel for its highest price since 2014.
The conflict in Ukraine has shaken markets globally and added to worries about economic growth in the face of rising inflation and plans from central banks to raise interest rates.
It's only the fourth time in history that the IEA has done a coordinated drawdown since the reserves were established in the wake of the Arab oil embargo in 1974.
In November, US President Joe Biden announced a coordinated release of 50 million barrels of oil in coordination with other energy-importing countries but the measure had only a fleeting impact on oil prices, which have continued to rise.
