The International Energy Agency and its 31 member countries agreed Tuesday to release 60 million barrels of oil from their strategic reserves half of that from the United States “to send a strong message to oil markets” that supplies won’t fall short after the Russian invasion of Ukraine, AP reports.
According to the report, the board of the Paris-based International Energy Agency decided at an extraordinary meeting of energy ministers chaired by U.S. Energy Secretary Jennifer Granholm. She said in a statement that U.S. President Joe Biden approved a commitment of 30 million barrels and that the U.S. is ready to “take additional measures” if needed.
The group’s “decision reflects our common commitment to address significant market and supply disruptions related to President Putin’s war on Ukraine,” Granholm said.
Russia plays an outsized role in global energy markets as the third-largest oil producer. Its exports of 5 million barrels of crude per day amount to about 12% of the global oil trade. Some 60% goes to Europe and another 20% to China.
So far, U.S. and European sanctions have not barred oil or gas exports and have included exceptions for transactions to pay for oil and gas. Western leaders are reluctant to restrict Russian oil exports at a time when global energy markets are tight and high prices are fueling inflation in developed economies.
But the invasion has still shaken markets worldwide. On Tuesday, oil prices soared, with U.S. benchmark crude surpassing $106 per barrel the highest price since 2014.
“The situation in energy markets is very serious and demands our full attention,” International Energy Agency executive director Fatih Birol said. “Global energy security is under threat, putting the world economy at risk during a fragile stage of the recovery.”
Last month, the International Energy Agency said global demand for oil was 100.2 million barrels a day in the fourth quarter of 2021. Demand is expected to grow to an average of 100.6 million barrels a day this year, as restrictions to limit the spread of COVID-19 are eased, the IEA said.
Besides the United States, other members of the organization include 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% of stockpiles or roughly 2 million barrels per day for 30 days.