The International Energy Agency said on Wednesday its member countries would unlock 400 million barrels of oil from their reserves to ease the impact of the Middle East war, the biggest such release ever.
The coordinated release was the sixth in the history of the organisation, which was created to coordinate responses to major supply disruptions after the 1973 oil crisis.
“IEA countries have unanimously decided to launch the largest-ever release of emergency oil stocks in our agency’s history. IEA countries will be making 400 million barrels of oil available,” IEA Executive Director Fatih Birol told reporters.
“This is a major action aiming to alleviate the immediate impacts of the disruption in markets,” he added.
“But to be clear, the most important thing for a return to stable flows of oil and gas is the resumption of transit through the Strait of Hormuz.”
The IEA-coordinated release exceeded the 182 million barrels of oil that member countries of the Paris-based global energy body released in 2022 when Russian leader Vladimir Putin invaded Ukraine.
The 32-member IEA said that the emergency stocks will be made available “over a timeframe that is appropriate to the national circumstances of each member country and will be supplemented by additional emergency measures by some countries”.
The crude market has been hit by wild volatility since the United States and Israel began striking Iran at the end of last month, with Tehran retaliating by attacking targets across the oil-rich Gulf and effectively shutting down the Strait of Hormuz.
The Strait normally carries about 20 per cent of the world’s oil and gas supplies.
– G7 coordination with Gulf countries –
The IEA announcement came as leaders of the Group of Seven advanced economies discussed the economic fallout from the US-Israeli war with Iran, now into its second week, at a video conference meeting chaired by French President Emmanuel Macron.
Macron, whose country holds the rotating presidency of the G7 advanced economies, urged US President Donald Trump and other G7 leaders to coordinate to open the strait “as soon as possible.”
At the same time, he said that the strait being choked “in no way” justify lifting the sanctions imposed on Russia over the invasion of Ukraine.
“The consensus was that we should not change our position on Russia and should maintain our efforts on Ukraine,” said Macron.
Macron said the G7 would coordinate moves with Gulf countries “in coming days”.
Macron has said France and its allies are preparing a “defensive” mission to reopen the strategically vital strait.
Earlier Wednesday, Japan — whose strategic oil reserves are among the world’s largest — and Germany said they would tap into their oil reserves.
Prime Minister Sanae Takaichi said Japan would release reserves as early as Monday, while Germany’s Economy and Energy Minister Katherina Reiche said her country planned to do the same, without specifying a date.
Reiche said a total of 2.4 million tons would be released.
US Interior Secretary Doug Burgum said the transit problem was “temporary.”
“What we have here is not a shortage of energy in the world. We’ve got a transit problem,” he said.
– ‘Pumping less oil’ –
Ipek Ozkardeskaya, a senior analyst at Swissquote Bank, said 400 million barrels would still be a “meagre” amount compared with the roughly 45 million barrels that IEA countries consume every day.
“It would therefore be a temporary fix,” she said.
“The Middle East is now pumping less oil — around six per cent less — in reaction to the Iran war.”
Countries around the world have been left scrambling in response to the oil price spikes.
Bangladesh has deployed the army to guard oil depots, India has imposed tighter controls over natural and cooking gas, and French officials conducted inspections at petrol stations and fined those found to be inflating prices.
Greece will cap profit margins on gasoline and a range of foodstuffs for three months, the prime minister said.
IEA country members hold over 1.2 billion barrels of public emergency oil stocks, with a further 600 million barrels of industry stocks held under government mandates.
