IEA member countries agree to release 60 million barrels of reserve oil

The International Energy Agency (IEA) has said it’s going to release 60 million barrels of oil held in emergency reserves to help offset any potential shortages likely to follow as the war between Russia and Ukraine continues.

The IEA said in a press release on Tuesday that the move will “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.”

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According to the agency, member countries hold 1.5 billion barrels of oil in emergency oil reserves. The release of the 60 million barrels, which accounts for 4% of the stockpile, comes down to 2 million barrels in daily global oil consumption for 30 days.

“The coordinated drawdown is the fourth in the history of the IEA, which was created in 1974. Previous collective actions were taken in 2011, 2005 and 1991,” the statement noted.

The release could help ease pressure in the energy sector, though this is still too small compared to the deficit likely if sanctions suck Russian supply off the market.

Currently, Vladimir Putin’s Russia ranks as the world’s third-largest oil producer. More than that, it’s the world’s largest exporter of oil and oil products. 

Russia reportedly produces 5 million barrels a day, with 60% of oil products exported to Europe and about 20% to China.

Oil prices surge to 7-year high

IEA’s announcement followed an Extraordinary Governing Board meeting chaired by US Secretary of Energy Jennifer Granholm.

It also came as oil surged to a new 7-year high on Monday, hitting over $106 per barrel amid growing fears of a shortfall as the war enters a second week. West Texas Intermediate (WTI) crude futures jumped more than 10% on Tuesday afternoon and traded around $105.63 per barrel. The intraday high of 106.78 reached earlier is the highest since early 2015.