IEA's Asian members begin deploying emergency oil reserves
International Energy Agency head Fatih Birol said Asian members were releasing more than 100 million barrels of crude to stabilize markets.
The International Energy Agency (IEA) has begun releasing its emergency oil reserves to the market, with Asian members starting deployment on Monday, according to the head of the Paris-based agency.
What happened: On March 11, the IEA announced that its 32 member states had unanimously agreed to draw a record 400 million barrels from emergency stocks to "address disruptions in oil markets stemming from the war in the Middle East."
IEA Executive Director Fatih Birol said in a video statement on Monday, “As I speak right now, additional barrels of oil are flowing into the market in Asia.” Asian countries will release more than 100 million barrels as part of the 400 million-barrel drawdown, he added.
Birol thanked several IEA member states that supported the release of reserves, including India, Colombia, Singapore, Thailand and Vietnam. He noted that the drawdown includes both crude oil and refined products.
On Sunday, the IEA said oil reserves held by members in Asia and Oceania could be released immediately as part of the coordinated drawdown. Committed stocks from these regions stood at 108.6 million barrels as of Sunday, according to the IEA.
Commenting on the near closure of the Strait of Hormuz due to the US-Iran war, Birol said, "I very much hope the situation will be resolved quickly to enable markets to start recovering. But of course, we need to be prepared in case it continues for a while longer," adding that even after the deployment, IEA member states will still have 1.4 billion barrels of oil in reserves, with more potentially available for release
“The security situation in the Middle East is still very much in flux. The IEA will continue to work very closely with governments around the world to discuss options to respond to the disruptions we are seeing,” Birol added.
Why it matters: The 400 million barrels mark the agency's largest-ever release of oil reserves, surpassing the previous release in 2022 after Russia’s full-scale invasion of Ukraine. The IEA was founded in 1974 following the 1973 oil crisis to ensure security and international cooperation in the energy sector.
The move comes as oil prices have surged above $100 a barrel amid the near-closure of the Strait of Hormuz since the recent escalation involving the United States, Israel and Iran. The vital waterway sees a fifth of the world’s oil and liquefied natural gas pass through it.
Know more: The IEA’s 32 members represent more than 1.2 billion barrels in government reserves and an additional 600 million barrels in industry-held volumes stored under government obligation, according to a March 11 statement.
Birol said on Monday that in the first oil release from IEA member countries, Asia Pacific and European members will release over 100 million barrels, while countries in the Americas are releasing more than 170 million barrels to the market.
He noted that consumers in developing economies in South and Southeast Asia are bearing the brunt of the energy crisis, as they depend on imports of liquefied petroleum gas (LPG) for activities such as cooking. Much of the LPG is imported from the Middle East, and global energy prices have risen sharply due to the war.
