Adds detail on US release, Opec JTC
The IEA will co-ordinate a release of 60mn bl of oil from strategic reserves, it said today, to demonstrate "there will be no shortfall of supplies as a result of Russia's invasion of Ukraine".
This is only the fourth time the IEA has undertaken a co-ordinated drawdown since it was founded in 1974, although the US organised a crude reserves release late last year. But global crude prices have risen steadily since then to eight-year highs above $100/bl, propelled recently by the possibility of sanctions cutting off Russian oil from the market.
The IEA today said Russia "plays an outsized role" in global energy markets. The agency's 31 members hold emergency stocks of 1.5bn bl.
The US will contribute half of the 60mn bl. "President Biden authorized me to make an initial commitment on behalf of the United States of 30mn bl of oil to be released from the Strategic Petroleum Reserve (SPR)," said US energy secretary and this year's IEA chair Jennifer Granholm. "We stand prepared to take additional measures if conditions warrant."
The US is in the process of releasing 40mn bl of crude from its SPR as part of co-ordinated action with some other key consumer countries to boost oil supply and lower fuel prices for consumers. This drawdown from the US is due to conclude on 30 June.
The new stocks release follows recent calls from IEA executive director Fatih Birol for the Opec+ coalition to accelerate its production increases and close the gap between its targets and delivered output. Opec+ ministers meet tomorrow to iron out their April production quotas. Delegates expect the group to raise its collective quota by another 400,000 b/d, in line with the roadmap agreed last summer, despite a report from the group's Joint Technical Committee (JTC) projecting a tighter market this year than previous forecasts.
The Russia-Ukraine conflict and its potential to cause supply disruptions were not discussed at today's JTC meeting, according to one delegate. Opec+ delegates have in the past warned that SPR releases are only short-term solutions to temper oil prices, as the stocks have to be replenished.
