IEA Confirms 60MM Barrel Release
The 31 member countries of the governing board of the International Energy Agency (IEA) agreed to release 60 million barrels of oil from their emergency reserves, the IEA announced late Tuesday.
The IEA outlined that the move was made to send a “unified and strong” message to global oil markets that there will be no shortfall in supplies as a result of Russia’s invasion of Ukraine. During the extraordinary governing board meeting to discuss the release, which was chaired by U.S. Energy Secretary Jennifer Granholm, IEA ministers noted, with concern, the energy security impacts of Russia’s actions and voiced support for sanctions imposed by the international community.
The ministers highlighted that Russia’s invasion comes against a backdrop of already tight global oil markets, heightened price volatility, commercial inventories that are at their lowest level since 2014, and a limited ability of producers to provide additional supply in the short term.
“It is heartening to see how quickly the global community has united to condemn Russia’s actions and respond decisively,” IEA Executive Director Fatih Birol said in an organization statement.
“I am pleased that the IEA has also come together … to take action. The situation in energy markets is very serious and demands our full attention. Global energy security is under threat, putting the world economy at risk during a fragile stage of the recovery,” he added in the statement.
The IEA noted that it will continue to closely monitor global oil and gas markets and to provide recommendations to the governing board, including possible additional emergency oil stock draws, as needed.
IEA members hold emergency stockpiles of 1.5 billion barrels, according to the IEA, which outlined that the 60 million barrel release represents four percent of those stockpiles and is equivalent to two million barrels per day for 30 days. This coordinated drawdown is the fourth in the history of the IEA, which was created in 1974, with previous collective actions taken in 2011, 2005 and 1991.
Prior to the IEA’s announcement, Bloomberg reported that the U.S. and other major economies had agreed on a coordinated release of oil stockpiles.
The U.S. Department of Energy (DOE) revealed that the U.S. plans to issue an emergency sale of 30 million barrels of crude oil from the Strategic Petroleum Reserve as part of the coordinated IEA action to release 60 million barrels.
The DOE outlined that its Office of Fossil Energy and Carbon Management (FECM) would issue a notice of sale for the 30 million barrels today.
“I chaired an emergency ministerial meeting of the International Energy Agency (IEA) – founded 50 years ago by the U.S. and other allies – where the United States and 30 other member countries, supported by the European Commission, agreed to collectively release an initial 60 million barrels of oil from strategic petroleum reserves,” Granholm stated following the emergency IEA meeting.
“This decision reflects our common commitment to address significant market and supply disruptions related to President Putin’s war on Ukraine. In line with this decision, President Biden authorized me to make an initial commitment on behalf of the United States of 30 million barrels of oil to be released from the Strategic Petroleum Reserve,” Granholm added in the statement.
“We stand prepared to take additional measures if conditions warrant,” Granholm went on to say.
In the statement, Granholm noted that the U.S. believes that investing in clean energy is the best way to reduce domestic and international dependence on Russian oil and gas.
“Clean energy technologies are available and cost-effective today and offer the surest path towards a world where energy supply cannot be used as a means of political coercion or a threat to national security, and where families and businesses are protected from volatile prices and markets,” Granholm said.
“Accordingly, we continue to support ambitious international clean energy goals and near-term action, including strong domestic climate action, and the pursuit of a net-zero emissions economy by 2050,” Granholm added.
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