The International Energy Agency (IEA) has ordered the largest release of government oil reserves in its history to help calm the oil price crisis triggered by the US-Israel attacks on Iran.
The world’s energy watchdog said its 32 members had agreed unanimously to release about 400 million barrels of emergency crude, which is over 30 per cent of the group’s total government stockpiles.
Members of the IEA, which was set up after the Middle East oil crisis in the 1970s, are required to hold at least 90 days’ worth of crude supplies in reserve, which can be released to the market in the event of a supply shock.
In total, its members hold more than 1.2 billion barrels of public emergency oil stocks and a further 600 million barrels of stocks held by industry under government obligation.
The latest emergency intervention is bigger than the release of 182 million barrels of oil by IEA countries after Russia’s full-scale invasion of Ukraine in February 2022.
The IEA said the emergency stocks would be made available to the global market, which has lost about 15 million barrels of crude a day because of a block on trade via the Strait of Hormuz, over a timeframe appropriate to the national circumstances of each member, bolstered by supplementary emergency measures from some countries.
The IEA executive director, Mr Fatih Birol, said: “Oil markets are global, so the response to major disruptions needs to be global, too. Energy security is the founding mandate of the IEA, and I am pleased that IEA members are showing strong solidarity in taking decisive action together.”
Although no G7 countries have faced physical shortages of oil since the war began last month, the price of Brent crude has fluctuated wildly, briefly jumping as high as $119.50 a barrel on Monday. As of press time, it is up 4 per cent at $92 per barrel.
The historic market intervention will deliver the equivalent of about 26 days of crude typically delivered via the strait, where deliveries have ground to a halt because of the threat of attack from Iran.
On Wednesday, three commercial vessels were attacked as Iran’s military said the world should be prepared for oil to hit $200 a barrel.