The International Energy Agency’s 31 Member Countries agreed to a new release of oil from emergency reserves in response to the market turmoil caused by Russia’s invasion of Ukraine, underscoring their strong and unified commitment to stabilising global energy markets.
The agreement follows the previous action taken by IEA Member Countries, announced last month, to which they pledged a total of 62.7 million barrels.
The Ministers noted that Russia’s war in Ukraine continues to put significant strains on global oil markets, resulting in heightened price volatility. This is taking place against a backdrop of commercial inventories that are at their lowest level since 2014 and a limited ability of oil producers to provide additional supply in the short term. Ministers also noted the particular difficulties in diesel markets.
The prospect of large-scale disruptions to Russian oil production is threatening to create a global oil supply shock. Russia plays an outsized role in global energy markets. It is the world’s third-largest oil producer and the largest exporter. Its exports of about 5 million barrels a day of crude oil represent roughly 12 per cent of global trade – and its approximately 2.85 million barrels a day of petroleum products represent around 15 per cent of global refined product trade. Around 60 per cent of Russia’s oil exports go to Europe and another 20 per cent to China.