All 31 member international locations of the International Energy Agency have agreed to launch 60 million barrels of oil from their strategic reserves, half of that from the United States, “to send a strong message to oil markets” that there will likely be “no shortfall in supplies ” after Russia invaded Ukraine, the group mentioned Tuesday.
The board of the Paris-based IEA made the choice at a unprecedented assembly of vitality ministers chaired by US Energy Secretary Jennifer Granholm. She mentioned in a press release that President Joe Biden authorised a dedication of 30 million barrels and that the US is able to “take additional measures” if wanted.
The group’s “decision reflects our common commitment to address significant market and supply disruptions related to President Putin’s war on Ukraine,” Granholm mentioned.
Russia performs an outsized function in international vitality markets because the third-largest oil producer.
Its exports of 5 million barrels of crude per day quantity to about 12 per cent of the worldwide oil commerce. Some 60 per cent goes to Europe and one other 20 per cent to China.
So far, US and European sanctions haven’t barred oil or gasoline exports and have included exceptions for transactions to pay for oil and gasoline. Western leaders are reluctant to limit Russian oil exports at a time when international vitality markets are tight and excessive costs are fueling inflation in developed economies.
But the invasion has nonetheless shaken markets worldwide. On Tuesday, oil costs soared, with the US benchmark crudely surpassing USD 100 per barrel, the very best value since 2014.
“The situation in energy markets is very serious and demands our full attention,” IEA government director Fatih Birol mentioned.
“Global energy security is under threat, putting the world economy at risk during a fragile stage of the recovery.”
Besides the United States, different members of the group embody Germany, France, the United Kingdom, Japan and Canada.
IEA members maintain emergency stockpiles of 1.5 billion barrels of oil.
The launch quantities to 4 per cent of stockpiles, or roughly 2 million barrels per day for 30 days.
It’s solely the fourth time in historical past that the IEA has carried out a coordinated drawdown for the reason that reserves had been established within the wake of the Arab oil embargo in 1974.
From the US perspective, the worth of crude oil determines a big portion of what drivers pay to replenish their automobiles with gasoline.
The nationwide common for a gallon of gasoline is USD 3.61, which is 26 cents greater than a month in the past and 90 cents greater than a 12 months in the past, in keeping with motor membership federation AAA.
In November, Biden introduced a launch of fifty million barrels of oil in coordination with different energy-importing international locations, however the measure had solely a fleeting affect on oil costs, which have continued to rise.
Granholm confused the necessity to put money into renewable vitality as a approach to cut back dependence on Russian oil and pure gasoline.
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With inputs from TheIndianEXPRESS
