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Ukraine war

IEA members agree to release 60m barrels of oil after Russian invasion

U.S. will supply half the volume, as it seeks to tame spike in prices with allies

Crude oil storage tanks at the Cushing oil hub in the U.S. state of Oklahoma. Member states of the International Energy Agency agreed on Tuesday to release 60 million barrels of oil from storage, with half the volume coming from the U.S.   © Reuters

TOKYO (Reuters) -- Members states of the International Energy Agency (IEA) agreed on Tuesday to release 60 million barrels from oil reserves, Japan's industry minister said, as the U.S. and its allies seek to cool oil prices soaring from Russia's invasion of Ukraine.

Half the volume will come from the United States, Koichi Hagiuda told reporters after the extraordinary ministerial meeting of the 31 members of the IEA, which represents mostly industrialised nations.

"We have agreed that IEA (members) as a whole will make a coordinated oil release of 60 million barrels in total," Hagiuda told reporters.

Oil markets were unmoved by the news, with Brent crude LCoc1 rising above $106 a barrel - its highest since 2014.

Prices have surged as some buyers shunned Russian barrels after Western allies imposed sanctions on Moscow, while supplies worldwide have tightened as economic demand has soared, with output struggling to keep up.

A disruption from Russia, one of the world's top oil producers which exports around 4-5 million barrels per day (bpd) of crude, could send prices even higher.

U.S. Energy Secretary Jennifer Granholm chaired the meeting of the Paris-based IEA which has coordinated three emergency oil stock releases in the past.

Founded in 1974 as an energy watchdog, the IEA and defines one of its main roles as helping "coordinate a collective response to major disruptions in the supply of oil".

Last November, the United States announced a release of 50 million barrels from the U.S. Strategic Petroleum Reserve, a move made in concert with oil consuming nations including China, India and Japan.

The IEA did not oversee that operation, saying at the time it only responds collectively to major supply disruptions. It last coordinated a release amid the oil supply disruption wrought by the Libyan Civil War in 2011.

China, the world's No.2 consumer and largest importer, never officially committed to that move and has been buying more for its reserves instead.

Biden has faced strong criticism from political opponents who say his climate-friendly policies have knee-capped U.S. energy production and driven up energy prices.

The United States is responsible for about half of the world's strategic petroleum reserves and the other 29 IEA members - including the United Kingdom, Germany, Japan and Australia - are required to hold oil in emergency reserves equivalent to 90 days of net oil imports.

Japan has one of the largest reserves after China and the United States.

The IEA said last month that commercial oil stocks in OECD countries were at the lowest level in more than seven years and covered just under 60 days of forward demand in December.

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