The 31 Member Countries of the Governing Board of the International Energy Agency (IEA) agreed to release 60 million barrels of oil from their emergency reserves to 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. The IEA Ministers noted with concern the energy security impacts of the egregious actions by Russia and voiced support for sanctions imposed by the international community in response.
They noted that Russia’s invasion comes against a backdrop of already tight global oil markets, heightened price volatility, commercial inventories that are at their lowest level since 2014 and a limited ability of producers to provide additional supply in the short term.
“It is heartening to see how quickly the global community has united to condemn Russia’s actions and respond decisively,” said IEA Executive Director Fatih Birol. “I am pleased that the IEA has also come together today to take action. The situation in energy markets is very serious and demands our full attention. Global energy security is under threat, putting the world economy at risk during a fragile stage of the recovery.”
IEA members hold emergency stockpiles of 1.5 billion barrels. The announcement of an initial release of 60 million barrels, or 4 per cent of those stockpiles, is equivalent to 2 million barrels a day for 30 days. The coordinated drawdown is the fourth in the history of the IEA, which was created in 1974.
According to the IEA, 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.
The Ministers resolved that energy supply should not be used as a means of political coercion nor as a threat to national and international security. The IEA Secretariat will continue to closely monitor global oil and gas markets and to provide recommendations to the Governing Board, including possible additional emergency oil stock draws, as needed.