The International Energy Agency (IEA) on Sunday (local time) shared an update regarding the release of emergency oil as the US and Israel’s war on Iran rages on. The agency said oil from the agency’s emergency reserves will soon start flowing to global markets to address supply disruptions.
Earlier this week, IEA announced that it is releasing 400 million barrels of oil from its emergency stockpile to the global markets in response to the disruptions caused by the conflict in the Middle East.
In a release shared today, it said that member countries have submitted their individual implementation plans to the IEA, adding that these plans indicate that oil stocks will be made available by the member countries in Asia Oceania immediately, whereas stocks from member nations in the Americas and Europe will be made available from the end of this month.
Oil release by member countries
According to the statement, the IEA noted that governments have agreed to release 271.7 million barrels of oil from government stocks, 116.6 million barrels from obligated industry stocks, and 23.6 million barrels from other sources.
The majority 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 be from government stocks and another 41.8 million from industry stocks.
Europe has committed 107.5 million barrels, including 32.7 million from government stocks. The IEA statement said that 72% of planned releases are in the form of crude oil and 28% are oil products.
Why is IEA releasing emergency oil?
The decision to release oil from its emergency stockpiles came as the US-Israel war on Iran continues, with no signs of easing off. The conflict has now plunged the Middle East region into a wider military confrontation, but is also impacting the countries that aren’t in the region.
After Israel killed Tehran’s former Supreme Leader Ayatollah Ali Khamenei in strikes on 28 February, Iran retaliated and targeted US bases in the Middle East and launched attacks at Israel. The Islamic Revolutionary Guards Corps (IRGC) announced the closure of the Strait of Hormuz, a key corridor, accounting for roughly 20% of the world’s oil supply. IRGC’s decision triggered panic and fear in the global energy market, with many left to worry about the upcoming days.
IEA’s decision to release oil from its 1.2 billion barrels of reserves is aimed at quelling those fears and the subsequent increase in oil and gas prices.
Earlier this week, Tehran said that the world should get ready to see oil prices at $200 a barrel as its forces continue to target ships on the strait.
Crude oil prices jump
The crude oil prices jumped to $120 a barrel earlier this week and created panic among traders and rattled the global energy markets, before retreating. Since the conflict began, oil prices have jumped 30%.
