A coordinated global effort to stabilize volatile energy markets gained momentum on Wednesday after the International Energy Agency (IEA) agreed to release the largest amount of emergency oil reserves in its history amid rising tensions in the Middle East.According to an AP report, the Paris-based agency will make available 400 million barrels from members’ strategic reserves — significantly more than the 182.7 million barrels released in 2022 following Russia’s invasion of Ukraine.IEA member countries currently have more than 1.2 billion barrels of public emergency oil reserves, plus an additional 600 million barrels of industry stocks under government obligation.
Conflict disrupts global oil flows
The decision follows a sharp deterioration in the regional security situation after Iran, responding to US and Israeli attacks, attacked commercial shipping in the Persian Gulf and effectively halted cargo movement through the Strait of Hormuz – a vital route for about a fifth of global oil shipments.Iran has also targeted oil fields and refineries in Gulf Arab countries with the aim of creating economic pressure on the United States and Israel to stop their military actions. The IEA said export volumes of crude and refined products have fallen to less than 10 percent of pre-war levels.
Countries have started releasing reserves
Germany and Austria confirmed they would release part of their strategic reserves following the IEA’s request, while Japan said it would start removing some stocks on Monday.Germany’s Economy Minister Katharina Reich said Berlin would act in line with the agency’s call to release “400 million barrels, which is equivalent to 54 million tonnes” of oil reserves, adding that the first deliveries could begin within days.“Germany stands behind the IEA’s most important principle of mutual solidarity,” he said.Austrian Economy Minister Wolfgang Heitmannsdorfer said Vienna would also release part of its emergency oil reserves and expand national strategic gas reserves. “One thing is clear: in any crisis, there should be no crisis winners at the expense of passengers and businesses,” he said.
G7 supports use of strategic shares
Group of Seven energy ministers had earlier expressed support in principle for “the implementation of proactive measures to address the situation, including the use of strategic reserves” following discussions at the IEA headquarters in Paris.Emergency reserves have been deployed in past supply disruptions, including the conflicts in Iraq, Libya and most recently the Ukraine war, as governments tried to prevent sharp rises in global energy prices.