IEA: Additional Oil Reserves Can Still Be Mobilized if Needed

The International Energy Agency (IEA) stated on Monday that additional oil reserves can still be mobilized if needed. The agency announced a record release of oil reserves last week to mitigate the impact of the Iran conflict.

IEA Executive Director Fatih Birol said in a televised statement that the ongoing emergency release will only reduce the agency’s reserves by about 20%. “We still have over 1.4 billion barrels of reserves, which means that if necessary in the future, we can take further action.”

The Middle East conflict has nearly halted shipping through the crucial Strait of Hormuz, forcing some of the world’s largest oil-producing countries to cut production and causing oil prices to surge over 40% in two weeks, rising above $100 per barrel. Last week, the IEA stated that this crisis is the largest supply disruption in the history of the oil market.

However, Birol also said that while releasing reserves can provide a buffer for now, it is not a long-term solution. He emphasized that the most important step is to reopen the Strait of Hormuz.

Birol noted that Asian markets are currently receiving more additional oil supplies. Asia relies most heavily on Middle Eastern oil transportation, making it the region most affected by the supply shortage. Major oil-producing countries like Iraq, due to transportation disruptions, have already lost a significant portion of their oil revenue.

As part of the IEA coordinated response, Asian countries have committed to releasing over 100 million barrels of oil reserves, Europe will release about 100 million barrels, and the Americas will release over 170 million barrels. Additionally, an extra 20 million barrels will be supplied through increased production. Birol said other countries supporting the IEA’s actions include India, Colombia, Singapore, Thailand, and Vietnam.

Birol also stated that the IEA has begun studying demand-side measures to propose relevant recommendations to further ensure energy security.

On Monday, with the easing of transportation disruptions through the Strait of Hormuz and expectations of more countries releasing oil reserves, international oil prices retreated. WTI April crude futures fell more than 5% during trading, to $93.50 per barrel.

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