International Energy Agency said Wednesday that its 32 member countries have unanimously approved the release of 400 million barrels of oil from strategic reserves, the largest coordinated drawdown in the agency’s history and only the fifth time such action has been taken.
IEA Executive Director Fatih Birol said in a statement that the move is intended to ease market disruptions linked to developments in the Middle East and the closure of the Strait of Hormuz. According to the agency, the timing of the release will depend on each member country’s national circumstances.
Birol also pointed to “major implications for jet fuel supply and diesel, in particular”, while describing the current conditions in natural gas markets as very challenging. He added that the release is designed to deliver short-term relief while urging the restoration of shipping traffic through the Strait of Hormuz.
The IEA secretariat said additional information on how the coordinated action will be carried out will be provided later. The agency added that it will continue to monitor global oil and gas markets closely.
IEA member states currently hold roughly 1.2 billion barrels of oil in government-controlled reserves, in addition to about 600 million barrels held in mandatory commercial stockpiles.